Correlation Between Bank of America and Copart
Can any of the company-specific risk be diversified away by investing in both Bank of America and Copart 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 Copart 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 Copart Inc, you can compare the effects of market volatilities on Bank of America and Copart 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 Copart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Copart.
Diversification Opportunities for Bank of America and Copart
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Copart is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Copart Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copart Inc 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 Copart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copart Inc has no effect on the direction of Bank of America i.e., Bank of America and Copart go up and down completely randomly.
Pair Corralation between Bank of America and Copart
Considering the 90-day investment horizon Bank of America is expected to generate 0.67 times more return on investment than Copart. However, Bank of America is 1.48 times less risky than Copart. It trades about 0.3 of its potential returns per unit of risk. Copart Inc is currently generating about -0.23 per unit of risk. If you would invest 3,810 in Bank of America on April 22, 2025 and sell it today you would earn a total of 938.00 from holding Bank of America or generate 24.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Copart Inc
Performance |
| Timeline |
| Bank of America |
| Copart Inc |
Bank of America and Copart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Copart
The main advantage of trading using opposite Bank of America and Copart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Copart 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 Copart will offset losses from the drop in Copart'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 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |