Correlation Between Bank of America and China Baoan
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By analyzing existing cross correlation between Bank of America and China Baoan Group, you can compare the effects of market volatilities on Bank of America and China Baoan 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 China Baoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and China Baoan.
Diversification Opportunities for Bank of America and China Baoan
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and China is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and China Baoan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Baoan Group 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 China Baoan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Baoan Group has no effect on the direction of Bank of America i.e., Bank of America and China Baoan go up and down completely randomly.
Pair Corralation between Bank of America and China Baoan
Considering the 90-day investment horizon Bank of America is expected to generate 1.16 times more return on investment than China Baoan. However, Bank of America is 1.16 times more volatile than China Baoan Group. It trades about 0.12 of its potential returns per unit of risk. China Baoan Group is currently generating about -0.28 per unit of risk. If you would invest 4,540 in Bank of America on November 7, 2024 and sell it today you would earn a total of 131.00 from holding Bank of America or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Bank of America vs. China Baoan Group
Performance |
| Timeline |
| Bank of America |
| China Baoan Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and China Baoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and China Baoan
The main advantage of trading using opposite Bank of America and China Baoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, China Baoan 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 China Baoan will offset losses from the drop in China Baoan's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Royal Bank of | Bank of America vs. Canadian Imperial 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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