Correlation Between Credit Acceptance and Bank of America
Can any of the company-specific risk be diversified away by investing in both Credit Acceptance 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 Credit Acceptance 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 Credit Acceptance and Bank of America, you can compare the effects of market volatilities on Credit Acceptance 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 Credit Acceptance with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Acceptance and Bank of America.
Diversification Opportunities for Credit Acceptance and Bank of America
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Credit and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Credit Acceptance 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 Credit Acceptance 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 Credit Acceptance 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 Credit Acceptance i.e., Credit Acceptance and Bank of America go up and down completely randomly.
Pair Corralation between Credit Acceptance and Bank of America
If you would invest 32,500 in Credit Acceptance on November 6, 2024 and sell it today you would earn a total of 0.00 from holding Credit Acceptance or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Acceptance vs. Bank of America
Performance |
| Timeline |
| Credit Acceptance |
| Bank of America |
Credit Acceptance and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Acceptance and Bank of America
The main advantage of trading using opposite Credit Acceptance and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Acceptance 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.| Credit Acceptance vs. Mitsubishi UFJ Financial | Credit Acceptance vs. Universal Health Services, | Credit Acceptance vs. Zoom Video Communications | Credit Acceptance vs. Monster Beverage |
| Bank of America vs. Extra Space Storage | Bank of America vs. Nordon Indstrias Metalrgicas | Bank of America vs. Paycom Software | Bank of America vs. METISA Metalrgica Timboense |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |