Correlation Between Bank of America and Corby Spirit
Can any of the company-specific risk be diversified away by investing in both Bank of America and Corby Spirit 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 Corby Spirit 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 Corby Spirit and, you can compare the effects of market volatilities on Bank of America and Corby Spirit 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 Corby Spirit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Corby Spirit.
Diversification Opportunities for Bank of America and Corby Spirit
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Corby is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Corby Spirit and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corby Spirit 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 Corby Spirit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corby Spirit has no effect on the direction of Bank of America i.e., Bank of America and Corby Spirit go up and down completely randomly.
Pair Corralation between Bank of America and Corby Spirit
Assuming the 90 days trading horizon Bank of America is expected to generate 1.13 times more return on investment than Corby Spirit. However, Bank of America is 1.13 times more volatile than Corby Spirit and. It trades about 0.3 of its potential returns per unit of risk. Corby Spirit and is currently generating about 0.06 per unit of risk. If you would invest 2,280 in Bank of America on October 24, 2024 and sell it today you would earn a total of 145.00 from holding Bank of America or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Corby Spirit and
Performance |
| Timeline |
| Bank of America |
| Corby Spirit |
Bank of America and Corby Spirit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Corby Spirit
The main advantage of trading using opposite Bank of America and Corby Spirit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Corby Spirit 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 Corby Spirit will offset losses from the drop in Corby Spirit's long position.| Bank of America vs. Cogeco Communications | Bank of America vs. Royal Bank of | Bank of America vs. Queens Road Capital | Bank of America vs. Gatos Silver |
| Corby Spirit vs. Corby Spirit and | Corby Spirit vs. Andrew Peller Limited | Corby Spirit vs. North West | Corby Spirit vs. Exco Technologies Limited |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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