Correlation Between ACCSYS TECHPLC and Bank of America Corp

Can any of the company-specific risk be diversified away by investing in both ACCSYS TECHPLC and Bank of America Corp 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 ACCSYS TECHPLC and Bank of America Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ACCSYS TECHPLC EO and Bank of America, you can compare the effects of market volatilities on ACCSYS TECHPLC and Bank of America Corp 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 ACCSYS TECHPLC with a short position of Bank of America Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACCSYS TECHPLC and Bank of America Corp.

Diversification Opportunities for ACCSYS TECHPLC and Bank of America Corp

-0.69

Correlation Coefficient

ACCSYS TECHPLC  Bank of America Corp

Excellent diversification

The 3 months correlation between ACCSYS and Bank is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ACCSYS TECHPLC EO and Bank of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of America Corp and ACCSYS TECHPLC 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 ACCSYS TECHPLC EO are associated (or correlated) with Bank of America Corp. 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 Corp has no effect on the direction of ACCSYS TECHPLC i.e., ACCSYS TECHPLC and Bank of America Corp go up and down completely randomly.

Pair Corralation between ACCSYS TECHPLC and Bank of America Corp

Assuming the 90 days horizon ACCSYS TECHPLC EO is expected to under-perform the Bank of America Corp. In addition to that, ACCSYS TECHPLC is 1.58 times more volatile than Bank of America. It trades about -0.1 of its total potential returns per unit of risk. Bank of America is currently generating about 0.15 per unit of volatility. If you would invest  4,347  in Bank of America on October 12, 2024 and sell it today you would earn a total of  132.00  from holding Bank of America or generate 3.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

ACCSYS TECHPLC EO  vs.  Bank of America

ACCSYS TECHPLC EO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACCSYS TECHPLC EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Bank of America Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of America are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental drivers, Bank of America Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ACCSYS TECHPLC and Bank of America Corp

The main advantage of trading using opposite ACCSYS TECHPLC and Bank of America Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACCSYS TECHPLC position performs unexpectedly, Bank of America Corp 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 Corp will offset losses from the drop in Bank of America Corp's long position.

The idea behind ACCSYS TECHPLC EO and Bank of America pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.