Correlation Between Bank of America and Nationwide Allianzgi

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

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

Diversification Opportunities for Bank of America and Nationwide Allianzgi

-0.45

Correlation Coefficient

Bank of America  Nationwide Allianzgi

Very good diversification

The 3 months correlation between Bank and Nationwide is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Nationwide Allianzgi Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Allianzgi and Bank of America 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 Bank of America are associated (or correlated) with Nationwide Allianzgi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Allianzgi has no effect on the direction of Bank of America i.e., Bank of America and Nationwide Allianzgi go up and down completely randomly.

Pair Corralation between Bank of America and Nationwide Allianzgi

Considering the 90-day investment horizon Bank of America is expected to under-perform the Nationwide Allianzgi. In addition to that, Bank of America is 1.66 times more volatile than Nationwide Allianzgi International. It trades about -0.02 of its total potential returns per unit of risk. Nationwide Allianzgi International is currently generating about 0.11 per unit of volatility. If you would invest  2,006  in Nationwide Allianzgi International on December 29, 2024 and sell it today you would earn a total of  130.00  from holding Nationwide Allianzgi International or generate 6.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Bank of America  vs.  Nationwide Allianzgi Internati

Bank of America

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank of America has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Bank of America is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Nationwide Allianzgi

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Allianzgi International are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking indicators, Nationwide Allianzgi may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Bank of America and Nationwide Allianzgi

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

The idea behind Bank of America and Nationwide Allianzgi International 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.