Correlation Between Bank of America and Advanced Info

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

Diversification Opportunities for Bank of America and Advanced Info

0.27

Correlation Coefficient

Bank of America  Advanced Info

Modest diversification

The 3 months correlation between Bank and Advanced is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Advanced Info Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Info Service 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 Advanced Info. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Info Service has no effect on the direction of Bank of America i.e., Bank of America and Advanced Info go up and down completely randomly.

Pair Corralation between Bank of America and Advanced Info

Considering the 90-day investment horizon Bank of America is expected to generate 1.45 times more return on investment than Advanced Info. However, Bank of America is 1.45 times more volatile than Advanced Info Service. It trades about 0.11 of its potential returns per unit of risk. Advanced Info Service is currently generating about 0.14 per unit of risk. If you would invest  4,796  in Bank of America on July 28, 2025 and sell it today you would earn a total of  461.00  from holding Bank of America or generate 9.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.85%
Values	Daily Returns

Bank of America  vs.  Advanced Info Service

Bank of America

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of America are ranked lower than 8 (%) 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 November 2025.

Advanced Info Service

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Info Service are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Advanced Info may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Bank of America and Advanced Info

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

The idea behind Bank of America and Advanced Info Service 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 Commodity Directory module to find actively traded commodities issued by global exchanges.