Correlation Between Bank of America and AOT Growth

Can any of the company-specific risk be diversified away by investing in both Bank of America and AOT Growth 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 AOT Growth 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 AOT Growth and, you can compare the effects of market volatilities on Bank of America and AOT Growth 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 AOT Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and AOT Growth.

Diversification Opportunities for Bank of America and AOT Growth

0.95

Correlation Coefficient

Bank of America  AOT Growth

Almost no diversification

The 3 months correlation between Bank and AOT is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and AOT Growth and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOT Growth 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 AOT Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOT Growth has no effect on the direction of Bank of America i.e., Bank of America and AOT Growth go up and down completely randomly.

Pair Corralation between Bank of America and AOT Growth

Considering the 90-day investment horizon Bank of America is expected to generate 1.66 times less return on investment than AOT Growth. In addition to that, Bank of America is 1.06 times more volatile than AOT Growth and. It trades about 0.16 of its total potential returns per unit of risk. AOT Growth and is currently generating about 0.27 per unit of volatility. If you would invest  4,133  in AOT Growth and on May 6, 2025 and sell it today you would earn a total of  908.00  from holding AOT Growth and or generate 21.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Bank of America  vs.  AOT Growth and

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 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Bank of America may actually be approaching a critical reversion point that can send shares even higher in September 2025.

AOT Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AOT Growth and are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, AOT Growth reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank of America and AOT Growth

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

The idea behind Bank of America and AOT Growth and 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.