Correlation Between Soar Technology and Bank of America
Can any of the company-specific risk be diversified away by investing in both Soar Technology 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 Soar Technology 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 Soar Technology Acquisition and Bank of America, you can compare the effects of market volatilities on Soar Technology 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 Soar Technology with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soar Technology and Bank of America.
Diversification Opportunities for Soar Technology and Bank of America
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Soar and Bank is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Soar Technology Acquisition 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 Soar Technology 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 Soar Technology Acquisition 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 Soar Technology i.e., Soar Technology and Bank of America go up and down completely randomly.
Pair Corralation between Soar Technology and Bank of America
Given the investment horizon of 90 days Soar Technology Acquisition is expected to under-perform the Bank of America. But the stock apears to be less risky and, when comparing its historical volatility, Soar Technology Acquisition is 2.66 times less risky than Bank of America. The stock trades about -0.1 of its potential returns per unit of risk. The Bank of America is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,693 in Bank of America on September 3, 2024 and sell it today you would earn a total of 605.00 from holding Bank of America or generate 35.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 1.41% |
| Values | Daily Returns |
Soar Technology Acquisition vs. Bank of America
Performance |
| Timeline |
| Soar Technology Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bank of America |
Soar Technology and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soar Technology and Bank of America
The main advantage of trading using opposite Soar Technology and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soar Technology 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.| Soar Technology vs. Bank of America | Soar Technology vs. Franklin Street Properties | Soar Technology vs. Guangdong Investment Limited | Soar Technology vs. Fidus Investment Corp |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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