Correlation Between Bank of America and Ziga Innovation
Can any of the company-specific risk be diversified away by investing in both Bank of America and Ziga Innovation 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 Ziga Innovation 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 Ziga Innovation Public, you can compare the effects of market volatilities on Bank of America and Ziga Innovation 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 Ziga Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Ziga Innovation.
Diversification Opportunities for Bank of America and Ziga Innovation
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and Ziga is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Ziga Innovation Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ziga Innovation Public 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 Ziga Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ziga Innovation Public has no effect on the direction of Bank of America i.e., Bank of America and Ziga Innovation go up and down completely randomly.
Pair Corralation between Bank of America and Ziga Innovation
Considering the 90-day investment horizon Bank of America is expected to generate 0.36 times more return on investment than Ziga Innovation. However, Bank of America is 2.77 times less risky than Ziga Innovation. It trades about 0.11 of its potential returns per unit of risk. Ziga Innovation Public is currently generating about 0.01 per unit of risk. If you would invest 2,583 in Bank of America on August 26, 2024 and sell it today you would earn a total of 2,117 from holding Bank of America or generate 81.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.95% |
| Values | Daily Returns |
Bank of America vs. Ziga Innovation Public
Performance |
| Timeline |
| Bank of America |
| Ziga Innovation Public |
Bank of America and Ziga Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Ziga Innovation
The main advantage of trading using opposite Bank of America and Ziga Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Ziga Innovation 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 Ziga Innovation will offset losses from the drop in Ziga Innovation's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Ziga Innovation vs. Jasmine International Public | Ziga Innovation vs. Jay Mart Public | Ziga Innovation vs. Union Petrochemical Public | Ziga Innovation vs. Gunkul Engineering Public |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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