B of A Story

<div class='circular--portrait' style='background:#FF6600;color: #FFFAFA;font-size:3em;'>BOA</div>
BAC -- USA Stock  

USD 24.90  0.03  0.12%

Considering the 60-days investment horizon, B of A is expected to generate 1.1 times less return on investment than the market. In addition to that, the company is 1.69 times more volatile than its market benchmark. It trades about 0.06 of its total potential returns per unit of risk. The DOW is currently generating roughly 0.12 per unit of volatility. Although many risk-takers are getting more into financial services space, some of us are not very happy with B of A's current volatility. We are going to analyze if the current expected returns justify B of A's volatility. B of A's very low volatility may have no significant impact on the stock's value as we estimate B of A as currently fairly valued. The real value, based on our calculations, is getting close to 26.17 per share.
Published over a week ago
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Is B of A (NYSE:BAC) low volatility a good sign for investors?
The company has 522.05 B in debt with debt to equity (D/E) ratio of 7.37, demonstrating that Bank Of America may be unable to create cash to meet all of its financial commitments.
Volatility is a rate at which the price of B of A or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of B of A may increase or decrease. In other words, similar to B of A's beta indicator, it measures the risk of B of A and helps estimate the fluctuations that may happen in a short period of time. So if prices of B of A fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.

How important is B of A's Liquidity

B of A financial leverage refers to using borrowed capital as a funding source to finance Bank Of America ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. B of A financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between B of A's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for B of A, but it might be worth checking our own buy vs. sell analysis

B of A Volatility Drivers

B of A unsystematic risk is unique to Bank Of America and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in B of A you can also buy Citigroup. You can also mitigate this risk by investing in the banks?diversified sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing B of A important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in B of A income statement and balance sheet. Here are more details about B of A volatility.
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