Correlation Between Bank of America and NSANY

Can any of the company-specific risk be diversified away by investing in both Bank of America and NSANY 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 NSANY 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 NSANY 4345 17 SEP 27, you can compare the effects of market volatilities on Bank of America and NSANY 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 NSANY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and NSANY.

Diversification Opportunities for Bank of America and NSANY

-0.47

Correlation Coefficient

Bank of America  NSANY

Very good diversification

The 3 months correlation between Bank and NSANY is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and NSANY 4345 17 SEP 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSANY 4345 17 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 NSANY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSANY 4345 17 has no effect on the direction of Bank of America i.e., Bank of America and NSANY go up and down completely randomly.

Pair Corralation between Bank of America and NSANY

Considering the 90-day investment horizon Bank of America is expected to under-perform the NSANY. In addition to that, Bank of America is 3.22 times more volatile than NSANY 4345 17 SEP 27. It trades about -0.02 of its total potential returns per unit of risk. NSANY 4345 17 SEP 27 is currently generating about -0.05 per unit of volatility. If you would invest  9,631  in NSANY 4345 17 SEP 27 on December 27, 2024 and sell it today you would lose (142.00) from holding NSANY 4345 17 SEP 27 or give up 1.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.0%
Values	Daily Returns

Bank of America  vs.  NSANY 4345 17 SEP 27

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

NSANY 4345 17

Risk-Adjusted Performance

Very Weak

Over the last 90 days NSANY 4345 17 SEP 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NSANY is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bank of America and NSANY

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

The idea behind Bank of America and NSANY 4345 17 SEP 27 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.