Correlation Between Bank of America and Penghua Shenzhen
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By analyzing existing cross correlation between Bank of America and Penghua Shenzhen Energy, you can compare the effects of market volatilities on Bank of America and Penghua Shenzhen 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 Penghua Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Penghua Shenzhen.
Diversification Opportunities for Bank of America and Penghua Shenzhen
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Penghua is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Penghua Shenzhen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penghua Shenzhen Energy 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 Penghua Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penghua Shenzhen Energy has no effect on the direction of Bank of America i.e., Bank of America and Penghua Shenzhen go up and down completely randomly.
Pair Corralation between Bank of America and Penghua Shenzhen
Considering the 90-day investment horizon Bank of America is expected to generate 1.7 times more return on investment than Penghua Shenzhen. However, Bank of America is 1.7 times more volatile than Penghua Shenzhen Energy. It trades about 0.13 of its potential returns per unit of risk. Penghua Shenzhen Energy is currently generating about 0.08 per unit of risk. If you would invest 3,290 in Bank of America on August 29, 2024 and sell it today you would earn a total of 1,496 from holding Bank of America or generate 45.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.78% |
| Values | Daily Returns |
Bank of America vs. Penghua Shenzhen Energy
Performance |
| Timeline |
| Bank of America |
| Penghua Shenzhen Energy |
Bank of America and Penghua Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Penghua Shenzhen
The main advantage of trading using opposite Bank of America and Penghua Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Penghua Shenzhen 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 Penghua Shenzhen will offset losses from the drop in Penghua Shenzhen'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 |
| Penghua Shenzhen vs. Zhongtong Guomai Communication | Penghua Shenzhen vs. Bus Online Co | Penghua Shenzhen vs. Guangzhou Dongfang Hotel | Penghua Shenzhen vs. Eastern Communications 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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