Correlation Between Bank of America and Shanghai Phichem
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By analyzing existing cross correlation between Bank of America and Shanghai Phichem Material, you can compare the effects of market volatilities on Bank of America and Shanghai Phichem 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 Shanghai Phichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Shanghai Phichem.
Diversification Opportunities for Bank of America and Shanghai Phichem
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Shanghai is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Shanghai Phichem Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Phichem Material 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 Shanghai Phichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Phichem Material has no effect on the direction of Bank of America i.e., Bank of America and Shanghai Phichem go up and down completely randomly.
Pair Corralation between Bank of America and Shanghai Phichem
Considering the 90-day investment horizon Bank of America is expected to generate 0.56 times more return on investment than Shanghai Phichem. However, Bank of America is 1.78 times less risky than Shanghai Phichem. It trades about 0.14 of its potential returns per unit of risk. Shanghai Phichem Material is currently generating about -0.1 per unit of risk. If you would invest 4,438 in Bank of America on October 25, 2024 and sell it today you would earn a total of 141.00 from holding Bank of America or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Bank of America vs. Shanghai Phichem Material
Performance |
| Timeline |
| Bank of America |
| Shanghai Phichem Material |
Bank of America and Shanghai Phichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Shanghai Phichem
The main advantage of trading using opposite Bank of America and Shanghai Phichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Shanghai Phichem 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 Shanghai Phichem will offset losses from the drop in Shanghai Phichem's long position.| Bank of America vs. JPMorgan Chase Co | Bank of America vs. Bank of America | Bank of America vs. RLJ Lodging Trust | Bank of America vs. PennyMac Finl Svcs |
| Shanghai Phichem vs. Lecron Energy Saving | Shanghai Phichem vs. HeNan Splendor Science | Shanghai Phichem vs. Industrial Bank Co | Shanghai Phichem vs. Guosheng Financial Holding |
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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