Correlation Between Bank of America and CBL Associates

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

Diversification Opportunities for Bank of America and CBL Associates

0.88

Correlation Coefficient

Bank of America  CBL Associates

Very poor diversification

The 3 months correlation between Bank and CBL is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CBL Associates Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBL Associates Properties 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 CBL Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBL Associates Properties has no effect on the direction of Bank of America i.e., Bank of America and CBL Associates go up and down completely randomly.

Pair Corralation between Bank of America and CBL Associates

Considering the 90-day investment horizon Bank of America is expected to under-perform the CBL Associates. In addition to that, Bank of America is 1.04 times more volatile than CBL Associates Properties. It trades about -0.23 of its total potential returns per unit of risk. CBL Associates Properties is currently generating about 0.15 per unit of volatility. If you would invest  2,555  in CBL Associates Properties on May 5, 2025 and sell it today you would earn a total of  101.00  from holding CBL Associates Properties or generate 3.95% return on investment over 90 days.

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

Bank of America  vs.  CBL Associates Properties

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 11 (%) 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.

CBL Associates Properties

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CBL Associates Properties are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent fundamental drivers, CBL Associates may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Bank of America and CBL Associates

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

The idea behind Bank of America and CBL Associates Properties 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.