Correlation Between Aerofoam Metals and Bank of America
Can any of the company-specific risk be diversified away by investing in both Aerofoam Metals 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 Aerofoam Metals 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 Aerofoam Metals and Bank of America, you can compare the effects of market volatilities on Aerofoam Metals 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 Aerofoam Metals with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerofoam Metals and Bank of America.
Diversification Opportunities for Aerofoam Metals and Bank of America
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aerofoam and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aerofoam Metals 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 Aerofoam Metals 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 Aerofoam Metals 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 Aerofoam Metals i.e., Aerofoam Metals and Bank of America go up and down completely randomly.
Pair Corralation between Aerofoam Metals and Bank of America
If you would invest 0.01 in Aerofoam Metals on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Aerofoam Metals or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Aerofoam Metals vs. Bank of America
Performance |
Timeline |
Aerofoam Metals |
Bank of America |
Aerofoam Metals and Bank of America Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aerofoam Metals and Bank of America
The main advantage of trading using opposite Aerofoam Metals and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerofoam Metals 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.Aerofoam Metals vs. Arhaus Inc | Aerofoam Metals vs. Floor Decor Holdings | Aerofoam Metals vs. Live Ventures | Aerofoam Metals vs. ATT Inc |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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