Correlation Between American Century and B of A

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both American Century 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 American Century 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 American Century Real and Bank Of America, you can compare the effects of market volatilities on American Century 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 American Century with a short position of B of A. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and B of A.

Diversification Opportunities for American Century and B of A

0.72
  Correlation Coefficient

Poor diversification

The 3 months correlation between American and B of A is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding American Century Real 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 American Century 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 American Century Real 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 American Century i.e., American Century and B of A go up and down completely randomly.

Pair Corralation between American Century and B of A

Assuming the 90 days horizon American Century Real is expected to under-perform the B of A. But the mutual fund apears to be less risky and, when comparing its historical volatility, American Century Real is 1.12 times less risky than B of A. The mutual fund trades about -0.42 of its potential returns per unit of risk. The Bank Of America is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest  3,306  in Bank Of America on July 5, 2022 and sell it today you would lose (286.00)  from holding Bank Of America or give up 8.65% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

American Century Real  vs.  Bank Of America

 Performance (%) 
       Timeline  
American Century Real 
American Performance
0 of 100
Over the last 90 days American Century Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest sluggish performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

American Price Channel

Bank Of America 
B of A Performance
0 of 100
Over the last 90 days Bank Of America has generated negative risk-adjusted returns adding no value to investors with long positions. 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

American Century and B of A Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with American Century and B of A

The main advantage of trading using opposite American Century and B of A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century 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.
American Century vs. International Business Machines
The idea behind American Century Real 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

Other Complementary Tools

CEO Directory
Screen CEOs from public companies around the world
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Bond Directory
Find actively traded corporate debentures issued by US companies
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go