Correlation Between CT Real and Bank of America
Can any of the company-specific risk be diversified away by investing in both CT Real 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 CT Real 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 CT Real Estate and Bank of America, you can compare the effects of market volatilities on CT Real 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 CT Real with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of CT Real and Bank of America.
Diversification Opportunities for CT Real and Bank of America
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CTRRF and Bank is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding CT Real Estate 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 CT Real 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 CT Real Estate 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 CT Real i.e., CT Real and Bank of America go up and down completely randomly.
Pair Corralation between CT Real and Bank of America
Assuming the 90 days horizon CT Real Estate is expected to under-perform the Bank of America. In addition to that, CT Real is 5.84 times more volatile than Bank of America. It trades about -0.21 of its total potential returns per unit of risk. Bank of America is currently generating about 0.09 per unit of volatility. If you would invest 2,245 in Bank of America on August 31, 2024 and sell it today you would earn a total of 28.00 from holding Bank of America or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CT Real Estate vs. Bank of America
Performance |
| Timeline |
| CT Real Estate |
| Bank of America |
CT Real and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CT Real and Bank of America
The main advantage of trading using opposite CT Real and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CT Real 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.| CT Real vs. Boston Properties | CT Real vs. Kilroy Realty Corp | CT Real vs. SL Green Realty | CT Real vs. Vornado Realty Trust |
| Bank of America vs. Bank of America | Bank of America vs. Wells Fargo | Bank of America vs. Bank of America | Bank of America vs. China Construction Bank |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance |