Correlation Between Bank of America and Nanhua Bio
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By analyzing existing cross correlation between Bank of America and Nanhua Bio Medicine, you can compare the effects of market volatilities on Bank of America and Nanhua Bio 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 Nanhua Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Nanhua Bio.
Diversification Opportunities for Bank of America and Nanhua Bio
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Nanhua is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Nanhua Bio Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanhua Bio Medicine 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 Nanhua Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanhua Bio Medicine has no effect on the direction of Bank of America i.e., Bank of America and Nanhua Bio go up and down completely randomly.
Pair Corralation between Bank of America and Nanhua Bio
Considering the 90-day investment horizon Bank of America is expected to generate 0.65 times more return on investment than Nanhua Bio. However, Bank of America is 1.54 times less risky than Nanhua Bio. It trades about 0.27 of its potential returns per unit of risk. Nanhua Bio Medicine is currently generating about 0.0 per unit of risk. If you would invest 4,253 in Bank of America on August 30, 2024 and sell it today you would earn a total of 524.00 from holding Bank of America or generate 12.32% 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. Nanhua Bio Medicine
Performance |
| Timeline |
| Bank of America |
| Nanhua Bio Medicine |
Bank of America and Nanhua Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Nanhua Bio
The main advantage of trading using opposite Bank of America and Nanhua Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Nanhua Bio 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 Nanhua Bio will offset losses from the drop in Nanhua Bio's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. JPMorgan Chase Co |
| Nanhua Bio vs. Yili Chuanning Biotechnology | Nanhua Bio vs. Advanced Technology Materials | Nanhua Bio vs. GRIPM Advanced Materials | Nanhua Bio vs. Guangzhou Tinci Materials |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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