Correlation Between Bank of America and Guru Organic
Can any of the company-specific risk be diversified away by investing in both Bank of America and Guru Organic 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 Guru Organic 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 Guru Organic Energy, you can compare the effects of market volatilities on Bank of America and Guru Organic 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 Guru Organic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Guru Organic.
Diversification Opportunities for Bank of America and Guru Organic
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Guru is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Guru Organic Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guru Organic Energy 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 Guru Organic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guru Organic Energy has no effect on the direction of Bank of America i.e., Bank of America and Guru Organic go up and down completely randomly.
Pair Corralation between Bank of America and Guru Organic
Assuming the 90 days trading horizon Bank of America is expected to generate 0.4 times more return on investment than Guru Organic. However, Bank of America is 2.53 times less risky than Guru Organic. It trades about 0.06 of its potential returns per unit of risk. Guru Organic Energy is currently generating about -0.01 per unit of risk. If you would invest 1,675 in Bank of America on August 28, 2024 and sell it today you would earn a total of 800.00 from holding Bank of America or generate 47.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Guru Organic Energy
Performance |
| Timeline |
| Bank of America |
| Guru Organic Energy |
Bank of America and Guru Organic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Guru Organic
The main advantage of trading using opposite Bank of America and Guru Organic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Guru Organic 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 Guru Organic will offset losses from the drop in Guru Organic's long position.| Bank of America vs. DelphX Capital Markets | Bank of America vs. Citadel Income | Bank of America vs. iShares Canadian HYBrid | Bank of America vs. Altagas Cum Red |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |