Correlation Between Capital BofA and Capital Ice
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By analyzing existing cross correlation between Capital BofA Merrill and Capital Ice 1 5, you can compare the effects of market volatilities on Capital BofA and Capital Ice 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 Capital BofA with a short position of Capital Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital BofA and Capital Ice.
Diversification Opportunities for Capital BofA and Capital Ice
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Capital and Capital is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Capital BofA Merrill and Capital Ice 1 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Ice 1 and Capital BofA 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 Capital BofA Merrill are associated (or correlated) with Capital Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Ice 1 has no effect on the direction of Capital BofA i.e., Capital BofA and Capital Ice go up and down completely randomly.
Pair Corralation between Capital BofA and Capital Ice
Assuming the 90 days trading horizon Capital BofA Merrill is expected to generate 1.59 times more return on investment than Capital Ice. However, Capital BofA is 1.59 times more volatile than Capital Ice 1 5. It trades about 0.41 of its potential returns per unit of risk. Capital Ice 1 5 is currently generating about 0.24 per unit of risk. If you would invest 3,808 in Capital BofA Merrill on September 5, 2024 and sell it today you would earn a total of 214.00 from holding Capital BofA Merrill or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital BofA Merrill vs. Capital Ice 1 5
Performance |
| Timeline |
| Capital BofA Merrill |
| Capital Ice 1 |
Capital BofA and Capital Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital BofA and Capital Ice
The main advantage of trading using opposite Capital BofA and Capital Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital BofA position performs unexpectedly, Capital Ice 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 Capital Ice will offset losses from the drop in Capital Ice's long position.| Capital BofA vs. Ruentex Development Co | Capital BofA vs. Symtek Automation Asia | Capital BofA vs. CTCI Corp | Capital BofA vs. Information Technology Total |
| Capital Ice vs. Capital ICE 15 | Capital Ice vs. Capital ICE International15 | Capital Ice vs. Capital BofA Merrill | Capital Ice vs. Capital Nasdaq Biotechnology |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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