Correlation Between Bank of America and HIVE Blockchain
Can any of the company-specific risk be diversified away by investing in both Bank of America and HIVE Blockchain 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 HIVE Blockchain 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 HIVE Blockchain Technologies, you can compare the effects of market volatilities on Bank of America and HIVE Blockchain 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 HIVE Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and HIVE Blockchain.
Diversification Opportunities for Bank of America and HIVE Blockchain
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and HIVE is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and HIVE Blockchain Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIVE Blockchain Tech 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 HIVE Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIVE Blockchain Tech has no effect on the direction of Bank of America i.e., Bank of America and HIVE Blockchain go up and down completely randomly.
Pair Corralation between Bank of America and HIVE Blockchain
Assuming the 90 days trading horizon Bank of America is expected to generate 1.31 times less return on investment than HIVE Blockchain. But when comparing it to its historical volatility, Bank of America is 3.5 times less risky than HIVE Blockchain. It trades about 0.1 of its potential returns per unit of risk. HIVE Blockchain Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 411.00 in HIVE Blockchain Technologies on August 29, 2024 and sell it today you would earn a total of 109.00 from holding HIVE Blockchain Technologies or generate 26.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. HIVE Blockchain Technologies
Performance |
| Timeline |
| Bank of America |
| HIVE Blockchain Tech |
Bank of America and HIVE Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and HIVE Blockchain
The main advantage of trading using opposite Bank of America and HIVE Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, HIVE Blockchain 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 HIVE Blockchain will offset losses from the drop in HIVE Blockchain'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 |
| HIVE Blockchain vs. Hut 8 Mining | HIVE Blockchain vs. Dmg Blockchain Solutions | HIVE Blockchain vs. Drone Delivery Canada | HIVE Blockchain vs. CryptoStar Corp |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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