Correlation Between Bank of America and Wuxi Chemical
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By analyzing existing cross correlation between Bank of America and Wuxi Chemical Equipment, you can compare the effects of market volatilities on Bank of America and Wuxi Chemical 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 Wuxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Wuxi Chemical.
Diversification Opportunities for Bank of America and Wuxi Chemical
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Wuxi is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Wuxi Chemical Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Chemical Equipment 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 Wuxi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Chemical Equipment has no effect on the direction of Bank of America i.e., Bank of America and Wuxi Chemical go up and down completely randomly.
Pair Corralation between Bank of America and Wuxi Chemical
Considering the 90-day investment horizon Bank of America is expected to generate 0.69 times more return on investment than Wuxi Chemical. However, Bank of America is 1.45 times less risky than Wuxi Chemical. It trades about 0.14 of its potential returns per unit of risk. Wuxi Chemical Equipment is currently generating about -0.01 per unit of risk. If you would invest 4,438 in Bank of America on October 25, 2024 and sell it today you would earn a total of 141.00 from holding Bank of America or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Bank of America vs. Wuxi Chemical Equipment
Performance |
| Timeline |
| Bank of America |
| Wuxi Chemical Equipment |
Bank of America and Wuxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Wuxi Chemical
The main advantage of trading using opposite Bank of America and Wuxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Wuxi Chemical 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 Wuxi Chemical will offset losses from the drop in Wuxi Chemical's long position.| Bank of America vs. JPMorgan Chase Co | Bank of America vs. Bank of America | Bank of America vs. RLJ Lodging Trust | Bank of America vs. PennyMac Finl Svcs |
| Wuxi Chemical vs. Shanghai Construction Group | Wuxi Chemical vs. Tederic Machinery Co | Wuxi Chemical vs. Tonghua Grape Wine | Wuxi Chemical vs. Nanxing Furniture Machinery |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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