Correlation Between Bank of America and Fujian Newland
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By analyzing existing cross correlation between Bank of America and Fujian Newland Computer, you can compare the effects of market volatilities on Bank of America and Fujian Newland 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 Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Fujian Newland.
Diversification Opportunities for Bank of America and Fujian Newland
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Fujian is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer 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 Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of Bank of America i.e., Bank of America and Fujian Newland go up and down completely randomly.
Pair Corralation between Bank of America and Fujian Newland
Considering the 90-day investment horizon Bank of America is expected to generate 0.56 times more return on investment than Fujian Newland. However, Bank of America is 1.79 times less risky than Fujian Newland. It trades about 0.27 of its potential returns per unit of risk. Fujian Newland Computer is currently generating about 0.12 per unit of risk. If you would invest 4,262 in Bank of America on August 28, 2024 and sell it today you would earn a total of 513.00 from holding Bank of America or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Fujian Newland Computer
Performance |
| Timeline |
| Bank of America |
| Fujian Newland Computer |
Bank of America and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Fujian Newland
The main advantage of trading using opposite Bank of America and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Fujian Newland 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 Fujian Newland will offset losses from the drop in Fujian Newland's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Fujian Newland vs. Agricultural Bank of | Fujian Newland vs. Industrial and Commercial | Fujian Newland vs. Bank of China | Fujian Newland vs. PetroChina Co Ltd |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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