Correlation Between Bank of America and Groupama Entreprises
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By analyzing existing cross correlation between Bank of America and Groupama Entreprises N, you can compare the effects of market volatilities on Bank of America and Groupama Entreprises 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 Groupama Entreprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Groupama Entreprises.
Diversification Opportunities for Bank of America and Groupama Entreprises
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Groupama is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Groupama Entreprises N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupama Entreprises 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 Groupama Entreprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupama Entreprises has no effect on the direction of Bank of America i.e., Bank of America and Groupama Entreprises go up and down completely randomly.
Pair Corralation between Bank of America and Groupama Entreprises
Considering the 90-day investment horizon Bank of America is expected to generate 103.77 times more return on investment than Groupama Entreprises. However, Bank of America is 103.77 times more volatile than Groupama Entreprises N. It trades about 0.11 of its potential returns per unit of risk. Groupama Entreprises N is currently generating about 0.98 per unit of risk. If you would invest 2,650 in Bank of America on August 30, 2024 and sell it today you would earn a total of 2,127 from holding Bank of America or generate 80.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.01% |
| Values | Daily Returns |
Bank of America vs. Groupama Entreprises N
Performance |
| Timeline |
| Bank of America |
| Groupama Entreprises |
Bank of America and Groupama Entreprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Groupama Entreprises
The main advantage of trading using opposite Bank of America and Groupama Entreprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Groupama Entreprises 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 Groupama Entreprises will offset losses from the drop in Groupama Entreprises' 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 |
| Groupama Entreprises vs. Lyxor 1 | Groupama Entreprises vs. Xtrackers ShortDAX | Groupama Entreprises vs. Xtrackers LevDAX |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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