Correlation Between Bank of America and Zhejiang Weixing
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By analyzing existing cross correlation between Bank of America and Zhejiang Weixing New, you can compare the effects of market volatilities on Bank of America and Zhejiang Weixing 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 Zhejiang Weixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Zhejiang Weixing.
Diversification Opportunities for Bank of America and Zhejiang Weixing
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Zhejiang is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Zhejiang Weixing New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Weixing New 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 Zhejiang Weixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Weixing New has no effect on the direction of Bank of America i.e., Bank of America and Zhejiang Weixing go up and down completely randomly.
Pair Corralation between Bank of America and Zhejiang Weixing
Considering the 90-day investment horizon Bank of America is expected to generate 0.64 times more return on investment than Zhejiang Weixing. However, Bank of America is 1.57 times less risky than Zhejiang Weixing. It trades about 0.12 of its potential returns per unit of risk. Zhejiang Weixing New is currently generating about -0.05 per unit of risk. If you would invest 2,787 in Bank of America on August 29, 2024 and sell it today you would earn a total of 1,990 from holding Bank of America or generate 71.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.19% |
| Values | Daily Returns |
Bank of America vs. Zhejiang Weixing New
Performance |
| Timeline |
| Bank of America |
| Zhejiang Weixing New |
Bank of America and Zhejiang Weixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Zhejiang Weixing
The main advantage of trading using opposite Bank of America and Zhejiang Weixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Zhejiang Weixing 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 Zhejiang Weixing will offset losses from the drop in Zhejiang Weixing'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 |
| Zhejiang Weixing vs. PetroChina Co Ltd | Zhejiang Weixing vs. China State Construction | Zhejiang Weixing vs. China Mobile Limited | Zhejiang Weixing vs. Industrial and Commercial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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