Correlation Between Bank of America and Hangzhou Weiguang
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By analyzing existing cross correlation between Bank of America and Hangzhou Weiguang Electronic, you can compare the effects of market volatilities on Bank of America and Hangzhou Weiguang 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 Hangzhou Weiguang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Hangzhou Weiguang.
Diversification Opportunities for Bank of America and Hangzhou Weiguang
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Hangzhou is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Hangzhou Weiguang Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Weiguang 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 Hangzhou Weiguang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Weiguang has no effect on the direction of Bank of America i.e., Bank of America and Hangzhou Weiguang go up and down completely randomly.
Pair Corralation between Bank of America and Hangzhou Weiguang
Considering the 90-day investment horizon Bank of America is expected to generate 0.64 times more return on investment than Hangzhou Weiguang. However, Bank of America is 1.55 times less risky than Hangzhou Weiguang. It trades about 0.06 of its potential returns per unit of risk. Hangzhou Weiguang Electronic is currently generating about 0.0 per unit of risk. If you would invest 3,079 in Bank of America on August 30, 2024 and sell it today you would earn a total of 1,698 from holding Bank of America or generate 55.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.16% |
| Values | Daily Returns |
Bank of America vs. Hangzhou Weiguang Electronic
Performance |
| Timeline |
| Bank of America |
| Hangzhou Weiguang |
Bank of America and Hangzhou Weiguang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Hangzhou Weiguang
The main advantage of trading using opposite Bank of America and Hangzhou Weiguang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Hangzhou Weiguang 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 Hangzhou Weiguang will offset losses from the drop in Hangzhou Weiguang'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 |
| Hangzhou Weiguang vs. PetroChina Co Ltd | Hangzhou Weiguang vs. China State Construction | Hangzhou Weiguang vs. China Mobile Limited | Hangzhou Weiguang 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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