Correlation Between Bank of America and Solid Impact
Can any of the company-specific risk be diversified away by investing in both Bank of America and Solid Impact 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 Solid Impact 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 Solid Impact Investments, you can compare the effects of market volatilities on Bank of America and Solid Impact 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 Solid Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Solid Impact.
Diversification Opportunities for Bank of America and Solid Impact
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Solid is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Solid Impact Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Impact Investments 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 Solid Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Impact Investments has no effect on the direction of Bank of America i.e., Bank of America and Solid Impact go up and down completely randomly.
Pair Corralation between Bank of America and Solid Impact
Assuming the 90 days trading horizon Bank of America is expected to generate 0.55 times more return on investment than Solid Impact. However, Bank of America is 1.81 times less risky than Solid Impact. It trades about 0.05 of its potential returns per unit of risk. Solid Impact Investments is currently generating about -0.06 per unit of risk. If you would invest 1,685 in Bank of America on September 24, 2024 and sell it today you would earn a total of 614.00 from holding Bank of America or generate 36.44% 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. Solid Impact Investments
Performance |
| Timeline |
| Bank of America |
| Solid Impact Investments |
Bank of America and Solid Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Solid Impact
The main advantage of trading using opposite Bank of America and Solid Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Solid Impact 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 Solid Impact will offset losses from the drop in Solid Impact's long position.| Bank of America vs. Precision Drilling | Bank of America vs. Arbor Metals Corp | Bank of America vs. Economic Investment Trust | Bank of America vs. Diversified Royalty Corp |
| Solid Impact vs. Berkshire Hathaway CDR | Solid Impact vs. JPMorgan Chase Co | Solid Impact vs. Bank of America | Solid Impact 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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