Correlation Between Bank of America and Citic Guoan
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By analyzing existing cross correlation between Bank of America and Citic Guoan Wine, you can compare the effects of market volatilities on Bank of America and Citic Guoan 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 Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Citic Guoan.
Diversification Opportunities for Bank of America and Citic Guoan
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Citic is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Citic Guoan Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Guoan Wine 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 Citic Guoan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Guoan Wine has no effect on the direction of Bank of America i.e., Bank of America and Citic Guoan go up and down completely randomly.
Pair Corralation between Bank of America and Citic Guoan
Considering the 90-day investment horizon Bank of America is expected to generate 0.55 times more return on investment than Citic Guoan. However, Bank of America is 1.82 times less risky than Citic Guoan. It trades about 0.1 of its potential returns per unit of risk. Citic Guoan Wine is currently generating about -0.01 per unit of risk. If you would invest 2,820 in Bank of America on August 31, 2024 and sell it today you would earn a total of 1,931 from holding Bank of America or generate 68.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.99% |
| Values | Daily Returns |
Bank of America vs. Citic Guoan Wine
Performance |
| Timeline |
| Bank of America |
| Citic Guoan Wine |
Bank of America and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Citic Guoan
The main advantage of trading using opposite Bank of America and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Citic Guoan 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 Citic Guoan will offset losses from the drop in Citic Guoan's long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
| Citic Guoan vs. Shuhua Sports Co | Citic Guoan vs. Everdisplay Optronics Shanghai | Citic Guoan vs. Xiandai Investment Co | Citic Guoan vs. Jiangsu Financial Leasing |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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