Correlation Between Bank of America and Qs Moderate

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

Diversification Opportunities for Bank of America and Qs Moderate

0.96

Correlation Coefficient

Bank of America  Qs Moderate

Almost no diversification

The 3 months correlation between Bank and SCGCX is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Qs Moderate Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs Moderate 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 Qs Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs Moderate Growth has no effect on the direction of Bank of America i.e., Bank of America and Qs Moderate go up and down completely randomly.

Pair Corralation between Bank of America and Qs Moderate

Considering the 90-day investment horizon Bank of America is expected to generate 2.19 times more return on investment than Qs Moderate. However, Bank of America is 2.19 times more volatile than Qs Moderate Growth. It trades about 0.26 of its potential returns per unit of risk. Qs Moderate Growth is currently generating about 0.27 per unit of risk. If you would invest  3,993  in Bank of America on May 1, 2025 and sell it today you would earn a total of  802.00  from holding Bank of America or generate 20.09% 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.  Qs Moderate Growth

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 20 (%) 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.

Qs Moderate Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Qs Moderate Growth are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Qs Moderate may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Bank of America and Qs Moderate

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

The idea behind Bank of America and Qs Moderate Growth 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.