Correlation Between Bank of America and EFG International
Can any of the company-specific risk be diversified away by investing in both Bank of America and EFG International 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 EFG International 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 EFG International AG, you can compare the effects of market volatilities on Bank of America and EFG International 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 EFG International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and EFG International.
Diversification Opportunities for Bank of America and EFG International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and EFG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and EFG International AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EFG International 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 EFG International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EFG International has no effect on the direction of Bank of America i.e., Bank of America and EFG International go up and down completely randomly.
Pair Corralation between Bank of America and EFG International
If you would invest 2,247 in Bank of America on September 23, 2024 and sell it today you would earn a total of 50.00 from holding Bank of America or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. EFG International AG
Performance |
| Timeline |
| Bank of America |
| EFG International |
Bank of America and EFG International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and EFG International
The main advantage of trading using opposite Bank of America and EFG International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, EFG International 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 EFG International will offset losses from the drop in EFG International's long position.| Bank of America vs. Bank of America | Bank of America vs. Wells Fargo | Bank of America vs. Bank of America | Bank of America vs. China Construction Bank |
| EFG International vs. China Construction Bank | EFG International vs. National Australia Bank | EFG International vs. Svenska Handelsbanken AB | EFG International vs. Bank of America |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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