Correlation Between Bank of America and Structure Therapeutics

Can any of the company-specific risk be diversified away by investing in both Bank of America and Structure Therapeutics 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 Bank of America and Structure Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bank of America and Structure Therapeutics American, you can compare the effects of market volatilities on Bank of America and Structure Therapeutics 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 Bank of America with a short position of Structure Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Structure Therapeutics.

Diversification Opportunities for Bank of America and Structure Therapeutics

-0.76

Correlation Coefficient

Bank of America  Structure Therapeutics

Pay attention - limited upside

The 3 months correlation between Bank and Structure is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Structure Therapeutics America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Structure Therapeutics and Bank of America 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 Bank of America are associated (or correlated) with Structure Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Structure Therapeutics has no effect on the direction of Bank of America i.e., Bank of America and Structure Therapeutics go up and down completely randomly.

Pair Corralation between Bank of America and Structure Therapeutics

Assuming the 90 days trading horizon Bank of America is expected to generate 0.14 times more return on investment than Structure Therapeutics. However, Bank of America is 6.98 times less risky than Structure Therapeutics. It trades about 0.18 of its potential returns per unit of risk. Structure Therapeutics American is currently generating about -0.12 per unit of risk. If you would invest  116,237  in Bank of America on April 25, 2025 and sell it today you would earn a total of  5,963  from holding Bank of America or generate 5.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bank of America  vs.  Structure Therapeutics America

Bank of America

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of America are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Bank of America is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Structure Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Structure Therapeutics American has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in August 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Bank of America and Structure Therapeutics

The main advantage of trading using opposite Bank of America and Structure Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Structure Therapeutics 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 Structure Therapeutics will offset losses from the drop in Structure Therapeutics' long position.

The idea behind Bank of America and Structure Therapeutics American 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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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.