Correlation Between Omnia Wellness and B of A

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

Diversification Opportunities for Omnia Wellness and B of A

-0.74
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Omnia and B of A is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Omnia Wellness 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 Omnia Wellness 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 Omnia Wellness 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 Omnia Wellness i.e., Omnia Wellness and B of A go up and down completely randomly.

Pair Corralation between Omnia Wellness and B of A

Given the investment horizon of 90 days Omnia Wellness is expected to generate 10.31 times more return on investment than B of A. However, Omnia Wellness is 10.31 times more volatile than Bank Of America. It trades about 0.08 of its potential returns per unit of risk. Bank Of America is currently generating about 0.04 per unit of risk. If you would invest  20.00  in Omnia Wellness on June 27, 2022 and sell it today you would lose (7.00)  from holding Omnia Wellness or give up 35.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy99.8%
ValuesDaily Returns

Omnia Wellness  vs.  Bank Of America

 Performance (%) 
       Timeline  
Omnia Wellness 
Omnia Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Omnia Wellness are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Omnia Wellness reported solid returns over the last few months and may actually be approaching a breakup point.

Omnia 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 current stock price disturbance, may contribute to short-term losses for the investors.

B of A Price Channel

Omnia Wellness and B of A Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Omnia Wellness and B of A

The main advantage of trading using opposite Omnia Wellness and B of A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omnia Wellness 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.
Omnia Wellness vs. Industrias Bachoco SA
The idea behind Omnia Wellness 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. China Construction B
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 Correlations module to find global opportunities by holding instruments from different markets.

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