Bank Of America Preferred Stock Volatility
| BAC-PE Preferred Stock | USD 24.11 0.03 0.12% |
At this point, Bank of America is very steady. Bank of America secures Sharpe Ratio (or Efficiency) of 0.0523, which signifies that the company had a 0.0523% return per unit of risk over the last 3 months. We have found twenty-nine technical indicators for Bank of America, which you can use to evaluate the volatility of the firm. Please confirm Bank of America's Risk Adjusted Performance of 0.0296, downside deviation of 0.584, and Mean Deviation of 0.3683 to double-check if the risk estimate we provide is consistent with the expected return of 0.0261%. Key indicators related to Bank of America's volatility include:
720 Days Market Risk | Chance Of Distress | 720 Days Economic Sensitivity |
Bank of America Preferred Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Bank daily returns, and it is calculated using variance and standard deviation. We also use Bank's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Bank of America volatility.
Bank |
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Bank of America can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game as hey may decide to buy additional stocks of Bank of America at lower prices to lower their average cost per share. Similarly, when the prices of Bank of America's stock rise, investors can sell out and invest the proceeds in other equities with better opportunities.
Moving together with Bank Preferred Stock
| 0.75 | BK | Bank of New York Fiscal Year End 10th of January 2025 | PairCorr |
| 0.78 | CM | Canadian Imperial Bank Fiscal Year End 5th of December 2024 | PairCorr |
| 0.67 | RY | Royal Bank Fiscal Year End 5th of December 2024 | PairCorr |
| 0.83 | BML-PG | Bank of America | PairCorr |
| 0.89 | BML-PH | Bank of America | PairCorr |
| 0.8 | BML-PJ | Bank of America | PairCorr |
| 0.91 | BML-PL | Bank of America | PairCorr |
Moving against Bank Preferred Stock
Bank of America Market Sensitivity And Downside Risk
Bank of America's beta coefficient measures the volatility of Bank preferred stock compared to the systematic risk of the entire market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Bank preferred stock's returns against your selected market. In other words, Bank of America's beta of -0.0211 provides an investor with an approximation of how much risk Bank of America preferred stock can potentially add to one of your existing portfolios. Bank of America exhibits very low volatility with skewness of -0.97 and kurtosis of 2.47. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Bank of America's preferred stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Bank of America's preferred stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different financial instruments as prices fall.
3 Months Beta |Analyze Bank of America Demand TrendCheck current 90 days Bank of America correlation with market (Dow Jones Industrial)Bank Beta |
Bank standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. A typical volatile entity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.
Standard Deviation | 0.5 |
It is essential to understand the difference between upside risk (as represented by Bank of America's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Bank of America's daily returns or price. Since the actual investment returns on holding a position in bank preferred stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Bank of America.
Bank of America Preferred Stock Volatility Analysis
Volatility refers to the frequency at which Bank of America preferred stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Bank of America's price changes. Investors will then calculate the volatility of Bank of America's preferred stock to predict their future moves. A preferred stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A preferred stock with relatively stable price changes has low volatility. A highly volatile preferred stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Bank of America's volatility:
Historical Volatility
This type of preferred stock volatility measures Bank of America's fluctuations based on previous trends. It's commonly used to predict Bank of America's future behavior based on its past. However, it cannot conclusively determine the future direction of the preferred stock.Implied Volatility
This type of volatility provides a positive outlook on future price fluctuations for Bank of America's current market price. This means that the preferred stock will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Bank of America's to be redeemed at a future date.Transformation |
The output start index for this execution was zero with a total number of output elements of sixty-one. Bank of America Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.
Bank of America Projected Return Density Against Market
Assuming the 90 days trading horizon Bank of America has a beta of -0.0211 suggesting as returns on the benchmark increase, returns on holding Bank of America are expected to decrease at a much lower rate. During a bear market, however, Bank of America is likely to outperform the market.Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Bank of America or Financial Services sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Bank of America's price will be affected by overall preferred stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Bank preferred stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
Bank of America has an alpha of 0.0145, implying that it can generate a 0.0145 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Bank of America Price Volatility?
Several factors can influence a preferred stock's market volatility:Industry
Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.Political and Economic environment
When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.The Company's Performance
Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.Bank of America Preferred Stock Risk Measures
Assuming the 90 days trading horizon the coefficient of variation of Bank of America is 1913.17. The daily returns are distributed with a variance of 0.25 and standard deviation of 0.5. The mean deviation of Bank of America is currently at 0.38. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.75
α | Alpha over Dow Jones | 0.01 | |
β | Beta against Dow Jones | -0.02 | |
σ | Overall volatility | 0.50 | |
Ir | Information ratio | -0.15 |
Bank of America Preferred Stock Return Volatility
Bank of America historical daily return volatility represents how much of Bank of America preferred stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The firm assumes 0.4985% volatility of returns over the 90 days investment horizon. By contrast, Dow Jones Industrial accepts 0.7608% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Bank of America Volatility
Volatility is a rate at which the price of Bank of America or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Bank of America may increase or decrease. In other words, similar to Bank's beta indicator, it measures the risk of Bank of America and helps estimate the fluctuations that may happen in a short period of time. So if prices of Bank of America fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small- and middle-market businesses, institutional investors, large corporations, and governments worldwide. Bank of America Corporation was founded in 1874 and is headquartered in Charlotte, North Carolina. Bank of America Dep operates under Banks - Global classification in USA and is traded on New York Stock Exchange. It employs 208984 people.
Bank of America's stock volatility refers to the amount of uncertainty or risk involved with the size of changes in its stock's price. It is a statistical measure of the dispersion of returns on Bank Preferred Stock over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Bank of America's price varies over time.
3 ways to utilize Bank of America's volatility to invest better
Higher Bank of America's preferred stock volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Bank of America preferred stock is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. Bank of America preferred stock volatility can provide helpful information for making investment decisions in the following ways:- Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of Bank of America investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Bank of America's preferred stock can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
- Diversification: Understanding how the volatility of Bank of America's preferred stock relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Bank of America Investment Opportunity
Dow Jones Industrial has a standard deviation of returns of 0.76 and is 1.52 times more volatile than Bank of America. Compared to the overall equity markets, volatility of historical daily returns of Bank of America is lower than 4 percent of all global equities and portfolios over the last 90 days. You can use Bank of America to enhance the returns of your portfolios. The preferred stock experiences a normal upward fluctuation. Check odds of Bank of America to be traded at $25.32 in 90 days.Good diversification
The correlation between Bank of America and DJI is -0.03 (i.e., Good diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and DJI in the same portfolio, assuming nothing else is changed.
Bank of America Additional Risk Indicators
The analysis of Bank of America's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Bank of America's investment and either accepting that risk or mitigating it. Along with some common measures of Bank of America preferred stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
| Risk Adjusted Performance | 0.0296 | |||
| Market Risk Adjusted Performance | (0.59) | |||
| Mean Deviation | 0.3683 | |||
| Semi Deviation | 0.5124 | |||
| Downside Deviation | 0.584 | |||
| Coefficient Of Variation | 2158.46 | |||
| Standard Deviation | 0.4908 |
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential preferred stocks, we recommend comparing similar preferred stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.
Bank of America Suggested Diversification Pairs
Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Bank of America as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Bank of America's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Bank of America's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Bank of America.
Complementary Tools for Bank Preferred Stock analysis
When running Bank of America's price analysis, check to measure Bank of America's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Bank of America is operating at the current time. Most of Bank of America's value examination focuses on studying past and present price action to predict the probability of Bank of America's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Bank of America's price. Additionally, you may evaluate how the addition of Bank of America to your portfolios can decrease your overall portfolio volatility.
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