Correlation Between Hp and B of A

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Hp and B of A 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 Hp and B of A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hp Inc and Bank Of America, you can compare the effects of market volatilities on Hp and B of A 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 Hp with a short position of B of A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hp and B of A.

Diversification Opportunities for Hp and B of A

0.68
  Correlation Coefficient

Poor diversification

The 23 months correlation between Hp and B of A is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hp Inc 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 Hp 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 Hp Inc are associated (or correlated) with B of A. 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 Hp i.e., Hp and B of A go up and down completely randomly.

Pair Corralation between Hp and B of A

Considering the 90-day investment horizon Hp Inc is expected to generate 1.02 times more return on investment than B of A. However, Hp is 1.02 times more volatile than Bank Of America. It trades about -0.15 of its potential returns per unit of risk. Bank Of America is currently generating about -0.17 per unit of risk. If you would invest  2,723  in Hp Inc on July 9, 2022 and sell it today you would lose (207.00)  from holding Hp Inc or give up 7.6% of portfolio value over 90 days.
Time Period23 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Hp Inc  vs.  Bank Of America

 Performance (%) 
       Timeline  
Hp Inc 
Hp Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Hp Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Hp is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the insiders.

Hp Price Channel

Bank Of America 
B of A Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bank Of America are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, B of A is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

B of A Price Channel

Hp and B of A Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hp and B of A

The main advantage of trading using opposite Hp and B of A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hp position performs unexpectedly, B of A 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 B of A will offset losses from the drop in B of A's long position.
Hp vs. Amazon Inc
The idea behind Hp Inc 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.
B of A vs. Amazon Inc
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 Focused Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
CEO Directory
Screen CEOs from public companies around the world
Go