Correlation Between Target Hospitality and BANK OF AMERICA

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Can any of the company-specific risk be diversified away by investing in both Target Hospitality 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 Target Hospitality 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 Target Hospitality Corp and BANK OF AMERICA, you can compare the effects of market volatilities on Target Hospitality 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 Target Hospitality with a short position of BANK OF AMERICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target Hospitality and BANK OF AMERICA.

Diversification Opportunities for Target Hospitality and BANK OF AMERICA

  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Target and BAC-PD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Target Hospitality Corp 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 Target Hospitality 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 Target Hospitality Corp 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 Target Hospitality i.e., Target Hospitality and BANK OF AMERICA go up and down completely randomly.

Pair Corralation between Target Hospitality and BANK OF AMERICA

If you would invest  1,590  in Target Hospitality Corp on December 21, 2022 and sell it today you would earn a total of  24.00  from holding Target Hospitality Corp or generate 1.51% return on investment over 90 days.
Time Period3 Months [change]
ValuesDaily Returns

Target Hospitality Corp  vs.  BANK OF AMERICA

 Performance (%) 
Target Hospitality Corp 

Target Performance

2 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Target Hospitality Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Target Hospitality is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

BAC-PD Performance

0 of 100

Over the last 90 days BANK OF AMERICA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BANK OF AMERICA is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Target Hospitality and BANK OF AMERICA Volatility Contrast

   Predicted Return Density   

Pair Trading with Target Hospitality and BANK OF AMERICA

The main advantage of trading using opposite Target Hospitality and BANK OF AMERICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target Hospitality 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.
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The idea behind Target Hospitality Corp 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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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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