Correlation Between Bank of America and FIBRA Storage
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By analyzing existing cross correlation between Bank of America and FIBRA Storage, you can compare the effects of market volatilities on Bank of America and FIBRA Storage 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 FIBRA Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and FIBRA Storage.
Diversification Opportunities for Bank of America and FIBRA Storage
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and FIBRA is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and FIBRA Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIBRA Storage 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 FIBRA Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIBRA Storage has no effect on the direction of Bank of America i.e., Bank of America and FIBRA Storage go up and down completely randomly.
Pair Corralation between Bank of America and FIBRA Storage
Assuming the 90 days trading horizon Bank of America is expected to generate 2.83 times more return on investment than FIBRA Storage. However, Bank of America is 2.83 times more volatile than FIBRA Storage. It trades about 0.27 of its potential returns per unit of risk. FIBRA Storage is currently generating about 0.17 per unit of risk. If you would invest 85,500 in Bank of America on August 31, 2024 and sell it today you would earn a total of 13,000 from holding Bank of America or generate 15.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. FIBRA Storage
Performance |
| Timeline |
| Bank of America |
| FIBRA Storage |
Bank of America and FIBRA Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and FIBRA Storage
The main advantage of trading using opposite Bank of America and FIBRA Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, FIBRA Storage 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 FIBRA Storage will offset losses from the drop in FIBRA Storage's long position.| Bank of America vs. Delta Air Lines | Bank of America vs. GMxico Transportes SAB | Bank of America vs. Micron Technology | Bank of America vs. CVS Health |
| FIBRA Storage vs. Prudential Financial | FIBRA Storage vs. Monster Beverage Corp | FIBRA Storage vs. New Oriental Education | FIBRA Storage vs. Micron Technology |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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