Correlation Between Bank of America and Ridgeworth Ceredex
Can any of the company-specific risk be diversified away by investing in both Bank of America and Ridgeworth Ceredex 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 Ridgeworth Ceredex 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 Ridgeworth Ceredex Mid Cap, you can compare the effects of market volatilities on Bank of America and Ridgeworth Ceredex 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 Ridgeworth Ceredex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Ridgeworth Ceredex.
Diversification Opportunities for Bank of America and Ridgeworth Ceredex
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Ridgeworth is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Ridgeworth Ceredex Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ridgeworth Ceredex Mid 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 Ridgeworth Ceredex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ridgeworth Ceredex Mid has no effect on the direction of Bank of America i.e., Bank of America and Ridgeworth Ceredex go up and down completely randomly.
Pair Corralation between Bank of America and Ridgeworth Ceredex
Considering the 90-day investment horizon Bank of America is expected to generate 1.5 times more return on investment than Ridgeworth Ceredex. However, Bank of America is 1.5 times more volatile than Ridgeworth Ceredex Mid Cap. It trades about 0.15 of its potential returns per unit of risk. Ridgeworth Ceredex Mid Cap is currently generating about 0.2 per unit of risk. If you would invest 4,088 in Bank of America on May 5, 2025 and sell it today you would earn a total of 478.00 from holding Bank of America or generate 11.69% 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. Ridgeworth Ceredex Mid Cap
Performance |
Timeline |
Bank of America |
Ridgeworth Ceredex Mid |
Bank of America and Ridgeworth Ceredex Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of America and Ridgeworth Ceredex
The main advantage of trading using opposite Bank of America and Ridgeworth Ceredex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Ridgeworth Ceredex 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 Ridgeworth Ceredex will offset losses from the drop in Ridgeworth Ceredex's long position.Bank of America vs. JPMorgan Chase Co | Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank |
Ridgeworth Ceredex vs. Pnc Balanced Allocation | Ridgeworth Ceredex vs. Barings Global Floating | Ridgeworth Ceredex vs. Mh Elite Fund | Ridgeworth Ceredex vs. T Rowe Price |
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 the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |