Correlation Between Bank of America and Queens Road
Can any of the company-specific risk be diversified away by investing in both Bank of America and Queens Road 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 Queens Road 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 Queens Road Capital, you can compare the effects of market volatilities on Bank of America and Queens Road 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 Queens Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Queens Road.
Diversification Opportunities for Bank of America and Queens Road
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Queens is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Queens Road Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queens Road Capital 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 Queens Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queens Road Capital has no effect on the direction of Bank of America i.e., Bank of America and Queens Road go up and down completely randomly.
Pair Corralation between Bank of America and Queens Road
Assuming the 90 days trading horizon Bank of America is expected to generate 0.66 times more return on investment than Queens Road. However, Bank of America is 1.53 times less risky than Queens Road. It trades about -0.23 of its potential returns per unit of risk. Queens Road Capital is currently generating about -0.24 per unit of risk. If you would invest 2,436 in Bank of America on September 23, 2024 and sell it today you would lose (137.00) from holding Bank of America or give up 5.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Queens Road Capital
Performance |
| Timeline |
| Bank of America |
| Queens Road Capital |
Bank of America and Queens Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Queens Road
The main advantage of trading using opposite Bank of America and Queens Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Queens Road 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 Queens Road will offset losses from the drop in Queens Road's long position.| Bank of America vs. Lion One Metals | Bank of America vs. Overactive Media Corp | Bank of America vs. iSign Media Solutions | Bank of America vs. Thunderbird Entertainment Group |
| Queens Road vs. Berkshire Hathaway CDR | Queens Road vs. JPMorgan Chase Co | Queens Road vs. Bank of America | Queens Road vs. Alphabet Inc CDR |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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