Correlation Between Bank of America and Ybox Real
Can any of the company-specific risk be diversified away by investing in both Bank of America and Ybox Real at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank of America and Ybox Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Ybox Real Estate, you can compare the effects of market volatilities on Bank of America and Ybox Real and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank of America with a short position of Ybox Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Ybox Real.
Diversification Opportunities for Bank of America and Ybox Real
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Ybox is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Ybox Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ybox Real Estate and Bank of America is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank of America are associated (or correlated) with Ybox Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ybox Real Estate has no effect on the direction of Bank of America i.e., Bank of America and Ybox Real go up and down completely randomly.
Pair Corralation between Bank of America and Ybox Real
Considering the 90-day investment horizon Bank of America is expected to generate 1.25 times less return on investment than Ybox Real. But when comparing it to its historical volatility, Bank of America is 1.41 times less risky than Ybox Real. It trades about 0.18 of its potential returns per unit of risk. Ybox Real Estate is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 7,920 in Ybox Real Estate on August 29, 2024 and sell it today you would earn a total of 1,350 from holding Ybox Real Estate or generate 17.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 71.88% |
| Values | Daily Returns |
Bank of America vs. Ybox Real Estate
Performance |
| Timeline |
| Bank of America |
| Ybox Real Estate |
Bank of America and Ybox Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Ybox Real
The main advantage of trading using opposite Bank of America and Ybox Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Ybox Real can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ybox Real will offset losses from the drop in Ybox Real's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. JPMorgan Chase Co |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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