Correlation Between Bank of America and Nanxing Furniture
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By analyzing existing cross correlation between Bank of America and Nanxing Furniture Machinery, you can compare the effects of market volatilities on Bank of America and Nanxing Furniture 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 Nanxing Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Nanxing Furniture.
Diversification Opportunities for Bank of America and Nanxing Furniture
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Nanxing is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Nanxing Furniture Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanxing Furniture 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 Nanxing Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanxing Furniture has no effect on the direction of Bank of America i.e., Bank of America and Nanxing Furniture go up and down completely randomly.
Pair Corralation between Bank of America and Nanxing Furniture
Considering the 90-day investment horizon Bank of America is expected to generate 1.51 times less return on investment than Nanxing Furniture. But when comparing it to its historical volatility, Bank of America is 1.96 times less risky than Nanxing Furniture. It trades about 0.06 of its potential returns per unit of risk. Nanxing Furniture Machinery is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,053 in Nanxing Furniture Machinery on August 28, 2024 and sell it today you would earn a total of 532.00 from holding Nanxing Furniture Machinery or generate 50.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.8% |
| Values | Daily Returns |
Bank of America vs. Nanxing Furniture Machinery
Performance |
| Timeline |
| Bank of America |
| Nanxing Furniture |
Bank of America and Nanxing Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Nanxing Furniture
The main advantage of trading using opposite Bank of America and Nanxing Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Nanxing Furniture 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 Nanxing Furniture will offset losses from the drop in Nanxing Furniture's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Nanxing Furniture vs. Dhc Software Co | Nanxing Furniture vs. Vanfund Urban Investment | Nanxing Furniture vs. China National Software | Nanxing Furniture vs. Chengdu Xingrong Investment |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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