Correlation Between Bank of America and Hubei Forbon
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By analyzing existing cross correlation between Bank of America and Hubei Forbon Technology, you can compare the effects of market volatilities on Bank of America and Hubei Forbon 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 Hubei Forbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Hubei Forbon.
Diversification Opportunities for Bank of America and Hubei Forbon
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Hubei is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Hubei Forbon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Forbon Technology 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 Hubei Forbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Forbon Technology has no effect on the direction of Bank of America i.e., Bank of America and Hubei Forbon go up and down completely randomly.
Pair Corralation between Bank of America and Hubei Forbon
Considering the 90-day investment horizon Bank of America is expected to generate 0.74 times more return on investment than Hubei Forbon. However, Bank of America is 1.36 times less risky than Hubei Forbon. It trades about 0.22 of its potential returns per unit of risk. Hubei Forbon Technology is currently generating about 0.03 per unit of risk. If you would invest 4,265 in Bank of America on August 25, 2024 and sell it today you would earn a total of 435.00 from holding Bank of America or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Hubei Forbon Technology
Performance |
| Timeline |
| Bank of America |
| Hubei Forbon Technology |
Bank of America and Hubei Forbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Hubei Forbon
The main advantage of trading using opposite Bank of America and Hubei Forbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Hubei Forbon 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 Hubei Forbon will offset losses from the drop in Hubei Forbon's long position.| Bank of America vs. Amtech Systems | Bank of America vs. Gold Fields Ltd | Bank of America vs. Aegean Airlines SA | Bank of America vs. Merck Company |
| Hubei Forbon vs. Huitong Construction Group | Hubei Forbon vs. Ningbo Construction Co | Hubei Forbon vs. Spring Airlines Co | Hubei Forbon vs. Zhejiang Yayi Metal |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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