Correlation Between Bank of America and Kinetics Global

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

Diversification Opportunities for Bank of America and Kinetics Global

0.54

Correlation Coefficient

Bank of America  Kinetics Global

Very weak diversification

The 3 months correlation between Bank and Kinetics is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Kinetics Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Global 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 Kinetics Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Global has no effect on the direction of Bank of America i.e., Bank of America and Kinetics Global go up and down completely randomly.

Pair Corralation between Bank of America and Kinetics Global

Considering the 90-day investment horizon Bank of America is expected to generate 1.05 times less return on investment than Kinetics Global. In addition to that, Bank of America is 1.17 times more volatile than Kinetics Global Fund. It trades about 0.1 of its total potential returns per unit of risk. Kinetics Global Fund is currently generating about 0.12 per unit of volatility. If you would invest  846.00  in Kinetics Global Fund on April 25, 2025 and sell it today you would earn a total of  889.00  from holding Kinetics Global Fund or generate 105.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.78%
Values	Daily Returns

Bank of America  vs.  Kinetics Global Fund

Bank of America

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of America are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Bank of America exhibited solid returns over the last few months and may actually be approaching a breakup point.

Kinetics Global

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Global Fund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Kinetics Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bank of America and Kinetics Global

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

The idea behind Bank of America and Kinetics Global Fund 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.