Correlation Between ISign Media and Bank of America
Can any of the company-specific risk be diversified away by investing in both ISign Media 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 ISign Media 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 iSign Media Solutions and Bank of America, you can compare the effects of market volatilities on ISign Media 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 ISign Media with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISign Media and Bank of America.
Diversification Opportunities for ISign Media and Bank of America
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between ISign and Bank is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding iSign Media Solutions 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 ISign Media 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 iSign Media Solutions 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 ISign Media i.e., ISign Media and Bank of America go up and down completely randomly.
Pair Corralation between ISign Media and Bank of America
Assuming the 90 days horizon iSign Media Solutions is expected to generate 30.12 times more return on investment than Bank of America. However, ISign Media is 30.12 times more volatile than Bank of America. It trades about 0.07 of its potential returns per unit of risk. Bank of America is currently generating about 0.05 per unit of risk. If you would invest 1.00 in iSign Media Solutions on September 23, 2024 and sell it today you would earn a total of 1,372 from holding iSign Media Solutions or generate 137200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iSign Media Solutions vs. Bank of America
Performance |
| Timeline |
| iSign Media Solutions |
| Bank of America |
ISign Media and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISign Media and Bank of America
The main advantage of trading using opposite ISign Media and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISign Media 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.| ISign Media vs. VIP Entertainment Technologies | ISign Media vs. Slate Grocery REIT | ISign Media vs. Richelieu Hardware | ISign Media vs. Questor Technology |
| Bank of America vs. Lion One Metals | Bank of America vs. Overactive Media Corp | Bank of America vs. iSign Media Solutions | Bank of America vs. Thunderbird Entertainment Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |