Correlation Between Bank of America and Fujian Rongji
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By analyzing existing cross correlation between Bank of America and Fujian Rongji Software, you can compare the effects of market volatilities on Bank of America and Fujian Rongji 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 Rongji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Fujian Rongji.
Diversification Opportunities for Bank of America and Fujian Rongji
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Fujian is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Fujian Rongji Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Rongji Software 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 Rongji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Rongji Software has no effect on the direction of Bank of America i.e., Bank of America and Fujian Rongji go up and down completely randomly.
Pair Corralation between Bank of America and Fujian Rongji
Considering the 90-day investment horizon Bank of America is expected to generate 0.41 times more return on investment than Fujian Rongji. However, Bank of America is 2.45 times less risky than Fujian Rongji. It trades about 0.14 of its potential returns per unit of risk. Fujian Rongji Software is currently generating about 0.01 per unit of risk. If you would invest 2,756 in Bank of America on September 1, 2024 and sell it today you would earn a total of 1,995 from holding Bank of America or generate 72.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.03% |
| Values | Daily Returns |
Bank of America vs. Fujian Rongji Software
Performance |
| Timeline |
| Bank of America |
| Fujian Rongji Software |
Bank of America and Fujian Rongji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Fujian Rongji
The main advantage of trading using opposite Bank of America and Fujian Rongji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Fujian Rongji 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 Rongji will offset losses from the drop in Fujian Rongji's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Fujian Rongji vs. Guangzhou Boji Medical | Fujian Rongji vs. Winner Medical Co | Fujian Rongji vs. Beijing Bewinner Communications | Fujian Rongji vs. Dongfeng Automobile Co |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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