Correlation Between Appian Corp and B of A

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Can any of the company-specific risk be diversified away by investing in both Appian Corp 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 Appian Corp 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 Appian Corp Cl and Bank Of America, you can compare the effects of market volatilities on Appian Corp 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 Appian Corp with a short position of B of A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appian Corp and B of A.

Diversification Opportunities for Appian Corp and B of A

-0.18
  Correlation Coefficient

Good diversification

The 3 months correlation between Appian and B of A is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Appian Corp Cl 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 Appian Corp 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 Appian Corp Cl 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 Appian Corp i.e., Appian Corp and B of A go up and down completely randomly.

Pair Corralation between Appian Corp and B of A

Given the investment horizon of 90 days Appian Corp Cl is expected to under-perform the B of A. In addition to that, Appian Corp is 2.8 times more volatile than Bank Of America. It trades about -0.03 of its total potential returns per unit of risk. Bank Of America is currently generating about 0.04 per unit of volatility. If you would invest  2,807  in Bank Of America on September 1, 2022 and sell it today you would earn a total of  893.00  from holding Bank Of America or generate 31.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Appian Corp Cl  vs.  Bank Of America

 Performance (%) 
       Timeline  
Appian Corp Cl 
Appian Performance
0 of 100
Over the last 90 days Appian Corp Cl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Appian Price Channel

Bank Of America 
B of A Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bank Of America are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, B of A may actually be approaching a critical reversion point that can send shares even higher in December 2022.

B of A Price Channel

Appian Corp and B of A Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Appian Corp and B of A

The main advantage of trading using opposite Appian Corp and B of A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appian Corp 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.
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The idea behind Appian Corp Cl 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.
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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