Correlation Between Bank of America and XiAn Dagang
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By analyzing existing cross correlation between Bank of America and XiAn Dagang Road, you can compare the effects of market volatilities on Bank of America and XiAn Dagang 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 XiAn Dagang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and XiAn Dagang.
Diversification Opportunities for Bank of America and XiAn Dagang
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and XiAn is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and XiAn Dagang Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XiAn Dagang Road 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 XiAn Dagang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XiAn Dagang Road has no effect on the direction of Bank of America i.e., Bank of America and XiAn Dagang go up and down completely randomly.
Pair Corralation between Bank of America and XiAn Dagang
Considering the 90-day investment horizon Bank of America is expected to generate 0.5 times more return on investment than XiAn Dagang. However, Bank of America is 2.02 times less risky than XiAn Dagang. It trades about 0.25 of its potential returns per unit of risk. XiAn Dagang Road is currently generating about -0.1 per unit of risk. If you would invest 4,395 in Bank of America on November 1, 2024 and sell it today you would earn a total of 272.50 from holding Bank of America or generate 6.2% 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. XiAn Dagang Road
Performance |
| Timeline |
| Bank of America |
| XiAn Dagang Road |
Bank of America and XiAn Dagang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and XiAn Dagang
The main advantage of trading using opposite Bank of America and XiAn Dagang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, XiAn Dagang 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 XiAn Dagang will offset losses from the drop in XiAn Dagang's long position.| Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Canadian Imperial Bank |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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