Correlation Between Ocumetics Technology and Bank of America
Can any of the company-specific risk be diversified away by investing in both Ocumetics Technology 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 Ocumetics Technology 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 Ocumetics Technology Corp and Bank of America, you can compare the effects of market volatilities on Ocumetics Technology 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 Ocumetics Technology with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocumetics Technology and Bank of America.
Diversification Opportunities for Ocumetics Technology and Bank of America
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ocumetics and Bank is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ocumetics Technology Corp and Bank of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of America and Ocumetics Technology 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 Ocumetics Technology Corp 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 Bank of America has no effect on the direction of Ocumetics Technology i.e., Ocumetics Technology and Bank of America go up and down completely randomly.
Pair Corralation between Ocumetics Technology and Bank of America
Assuming the 90 days horizon Ocumetics Technology is expected to generate 2.47 times less return on investment than Bank of America. In addition to that, Ocumetics Technology is 2.61 times more volatile than Bank of America. It trades about 0.02 of its total potential returns per unit of risk. Bank of America is currently generating about 0.12 per unit of volatility. If you would invest 1,374 in Bank of America on September 26, 2024 and sell it today you would earn a total of 935.00 from holding Bank of America or generate 68.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ocumetics Technology Corp vs. Bank of America
Performance |
Timeline |
Ocumetics Technology Corp |
Bank of America |
Ocumetics Technology and Bank of America Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ocumetics Technology and Bank of America
The main advantage of trading using opposite Ocumetics Technology and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocumetics Technology 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.Ocumetics Technology vs. KDA Group | Ocumetics Technology vs. iShares Canadian HYBrid | Ocumetics Technology vs. Altagas Cum Red | Ocumetics Technology vs. European Residential Real |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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