Correlation Between Bank of America and VIP Entertainment
Can any of the company-specific risk be diversified away by investing in both Bank of America and VIP Entertainment 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 VIP Entertainment 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 VIP Entertainment Technologies, you can compare the effects of market volatilities on Bank of America and VIP Entertainment 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 VIP Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and VIP Entertainment.
Diversification Opportunities for Bank of America and VIP Entertainment
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and VIP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and VIP Entertainment Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIP Entertainment 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 VIP Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIP Entertainment has no effect on the direction of Bank of America i.e., Bank of America and VIP Entertainment go up and down completely randomly.
Pair Corralation between Bank of America and VIP Entertainment
Assuming the 90 days trading horizon Bank of America is expected to generate 0.13 times more return on investment than VIP Entertainment. However, Bank of America is 7.47 times less risky than VIP Entertainment. It trades about 0.1 of its potential returns per unit of risk. VIP Entertainment Technologies is currently generating about -0.07 per unit of risk. If you would invest 2,054 in Bank of America on September 2, 2024 and sell it today you would earn a total of 434.00 from holding Bank of America or generate 21.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bank of America vs. VIP Entertainment Technologies
Performance |
| Timeline |
| Bank of America |
| VIP Entertainment |
Bank of America and VIP Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and VIP Entertainment
The main advantage of trading using opposite Bank of America and VIP Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, VIP Entertainment 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 VIP Entertainment will offset losses from the drop in VIP Entertainment's long position.| Bank of America vs. Birchtech Corp | Bank of America vs. US Financial 15 | Bank of America vs. Enerev5 Metals | Bank of America vs. North American Financial |
| VIP Entertainment vs. CNJ Capital Investments | VIP Entertainment vs. Perseus Mining | VIP Entertainment vs. NeXGold Mining Corp | VIP Entertainment vs. Arizona Gold Silver |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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