Correlation Between Computer Modelling and Bank of America
Can any of the company-specific risk be diversified away by investing in both Computer Modelling and Bank of America 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 Computer Modelling and Bank of America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computer Modelling Group and Bank of America, you can compare the effects of market volatilities on Computer Modelling and Bank of America 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 Computer Modelling with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Modelling and Bank of America.
Diversification Opportunities for Computer Modelling and Bank of America
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Computer and Bank is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Computer Modelling Group and Bank of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of America and Computer Modelling 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 Computer Modelling Group are associated (or correlated) with Bank of America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of America has no effect on the direction of Computer Modelling i.e., Computer Modelling and Bank of America go up and down completely randomly.
Pair Corralation between Computer Modelling and Bank of America
Assuming the 90 days trading horizon Computer Modelling Group is expected to under-perform the Bank of America. In addition to that, Computer Modelling is 1.88 times more volatile than Bank of America. It trades about -0.08 of its total potential returns per unit of risk. Bank of America is currently generating about 0.29 per unit of volatility. If you would invest 2,153 in Bank of America on September 4, 2024 and sell it today you would earn a total of 293.00 from holding Bank of America or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Computer Modelling Group vs. Bank of America
Performance |
| Timeline |
| Computer Modelling |
| Bank of America |
Computer Modelling and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Modelling and Bank of America
The main advantage of trading using opposite Computer Modelling and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Modelling position performs unexpectedly, Bank of America 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 Bank of America will offset losses from the drop in Bank of America's long position.| Computer Modelling vs. Pason Systems | Computer Modelling vs. Evertz Technologies Limited | Computer Modelling vs. Descartes Systems Group | Computer Modelling vs. Enerflex |
| Bank of America vs. Computer Modelling Group | Bank of America vs. Solid Impact Investments | Bank of America vs. Canadian General Investments | Bank of America vs. Partners Value Investments |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |