Correlation Between Bank of America and CSPC Innovation
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By analyzing existing cross correlation between Bank of America and CSPC Innovation Pharmaceutical, you can compare the effects of market volatilities on Bank of America and CSPC Innovation 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 CSPC Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and CSPC Innovation.
Diversification Opportunities for Bank of America and CSPC Innovation
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and CSPC is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CSPC Innovation Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSPC Innovation Phar 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 CSPC Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSPC Innovation Phar has no effect on the direction of Bank of America i.e., Bank of America and CSPC Innovation go up and down completely randomly.
Pair Corralation between Bank of America and CSPC Innovation
Considering the 90-day investment horizon Bank of America is expected to generate 3.43 times less return on investment than CSPC Innovation. But when comparing it to its historical volatility, Bank of America is 2.5 times less risky than CSPC Innovation. It trades about 0.06 of its potential returns per unit of risk. CSPC Innovation Pharmaceutical is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 828.00 in CSPC Innovation Pharmaceutical on September 3, 2024 and sell it today you would earn a total of 2,023 from holding CSPC Innovation Pharmaceutical or generate 244.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.36% |
| Values | Daily Returns |
Bank of America vs. CSPC Innovation Pharmaceutical
Performance |
| Timeline |
| Bank of America |
| CSPC Innovation Phar |
Bank of America and CSPC Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and CSPC Innovation
The main advantage of trading using opposite Bank of America and CSPC Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, CSPC Innovation 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 CSPC Innovation will offset losses from the drop in CSPC Innovation's long position.| Bank of America vs. Partner Communications | Bank of America vs. Merck Company | Bank of America vs. Western Midstream Partners | Bank of America vs. Edgewise Therapeutics |
| CSPC Innovation vs. Huitong Construction Group | CSPC Innovation vs. China Asset Management | CSPC Innovation vs. Lutian Machinery Co | CSPC Innovation vs. Cicc Fund Management |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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