Correlation Between Bank of America and WFD Unibail
Can any of the company-specific risk be diversified away by investing in both Bank of America and WFD Unibail at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank of America and WFD Unibail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and WFD Unibail Rodamco, you can compare the effects of market volatilities on Bank of America and WFD Unibail 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 WFD Unibail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and WFD Unibail.
Diversification Opportunities for Bank of America and WFD Unibail
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and WFD is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and WFD Unibail Rodamco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WFD Unibail Rodamco 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 WFD Unibail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WFD Unibail Rodamco has no effect on the direction of Bank of America i.e., Bank of America and WFD Unibail go up and down completely randomly.
Pair Corralation between Bank of America and WFD Unibail
Considering the 90-day investment horizon Bank of America is expected to generate 1.29 times more return on investment than WFD Unibail. However, Bank of America is 1.29 times more volatile than WFD Unibail Rodamco. It trades about 0.26 of its potential returns per unit of risk. WFD Unibail Rodamco is currently generating about -0.02 per unit of risk. If you would invest 3,968 in Bank of America on August 30, 2024 and sell it today you would earn a total of 809.00 from holding Bank of America or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. WFD Unibail Rodamco
Performance |
| Timeline |
| Bank of America |
| WFD Unibail Rodamco |
Bank of America and WFD Unibail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and WFD Unibail
The main advantage of trading using opposite Bank of America and WFD Unibail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, WFD Unibail 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 WFD Unibail will offset losses from the drop in WFD Unibail'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 |
| WFD Unibail vs. FISH PAYK HEALTH | WFD Unibail vs. Monster Beverage Corp | WFD Unibail vs. EHEALTH | WFD Unibail vs. FEMALE HEALTH |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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