Correlation Between Moncler SpA and Bank of America
Can any of the company-specific risk be diversified away by investing in both Moncler SpA 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 Moncler SpA 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 Moncler SpA and Verizon Communications, you can compare the effects of market volatilities on Moncler SpA 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 Moncler SpA with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moncler SpA and Bank of America.
Diversification Opportunities for Moncler SpA and Bank of America
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Moncler and Bank is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Moncler SpA and Verizon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications and Moncler SpA 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 Moncler SpA 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 Verizon Communications has no effect on the direction of Moncler SpA i.e., Moncler SpA and Bank of America go up and down completely randomly.
Pair Corralation between Moncler SpA and Bank of America
Assuming the 90 days horizon Moncler SpA is expected to under-perform the Bank of America. In addition to that, Moncler SpA is 1.43 times more volatile than Verizon Communications. It trades about -0.33 of its total potential returns per unit of risk. Verizon Communications is currently generating about 0.26 per unit of volatility. If you would invest 3,857 in Verizon Communications on August 25, 2024 and sell it today you would earn a total of 291.00 from holding Verizon Communications or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moncler SpA vs. Verizon Communications
Performance |
| Timeline |
| Moncler SpA |
| Verizon Communications |
Moncler SpA and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moncler SpA and Bank of America
The main advantage of trading using opposite Moncler SpA and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moncler SpA 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.| Moncler SpA vs. BURLINGTON STORES | Moncler SpA vs. Computershare Limited | Moncler SpA vs. Retail Estates NV | Moncler SpA vs. Verizon Communications |
| Bank of America vs. Apple Inc | Bank of America vs. Apple Inc | Bank of America vs. Apple Inc | Bank of America vs. Apple Inc |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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