Correlation Between Orbit Garant and Bank of America

Can any of the company-specific risk be diversified away by investing in both Orbit Garant and Bank of America 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 Orbit Garant and Bank of America into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Orbit Garant Drilling and Bank of America, you can compare the effects of market volatilities on Orbit Garant and Bank of America 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 Orbit Garant with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orbit Garant and Bank of America.

Diversification Opportunities for Orbit Garant and Bank of America

0.27

Correlation Coefficient

Orbit Garant  Bank of America

Modest diversification

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

Pair Corralation between Orbit Garant and Bank of America

Assuming the 90 days trading horizon Orbit Garant is expected to generate 2.5 times less return on investment than Bank of America. In addition to that, Orbit Garant is 2.13 times more volatile than Bank of America. It trades about 0.06 of its total potential returns per unit of risk. Bank of America is currently generating about 0.3 per unit of volatility. If you would invest  1,883  in Bank of America on April 21, 2025 and sell it today you would earn a total of  541.00  from holding Bank of America or generate 28.73% return on investment over 90 days.

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

Orbit Garant Drilling  vs.  Bank of America

Orbit Garant Drilling

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Orbit Garant Drilling are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Orbit Garant may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Bank of America exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orbit Garant and Bank of America

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

The idea behind Orbit Garant Drilling and Bank of America 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.