Correlation Between Bank of America and Shanghai Broadband
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By analyzing existing cross correlation between Bank of America and Shanghai Broadband Technology, you can compare the effects of market volatilities on Bank of America and Shanghai Broadband 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 Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Shanghai Broadband.
Diversification Opportunities for Bank of America and Shanghai Broadband
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Shanghai is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Shanghai Broadband Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Broadband 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 Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Broadband has no effect on the direction of Bank of America i.e., Bank of America and Shanghai Broadband go up and down completely randomly.
Pair Corralation between Bank of America and Shanghai Broadband
Considering the 90-day investment horizon Bank of America is expected to generate 1.52 times less return on investment than Shanghai Broadband. But when comparing it to its historical volatility, Bank of America is 1.26 times less risky than Shanghai Broadband. It trades about 0.31 of its potential returns per unit of risk. Shanghai Broadband Technology is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 335.00 in Shanghai Broadband Technology on September 1, 2024 and sell it today you would earn a total of 75.00 from holding Shanghai Broadband Technology or generate 22.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. Shanghai Broadband Technology
Performance |
| Timeline |
| Bank of America |
| Shanghai Broadband |
Bank of America and Shanghai Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Shanghai Broadband
The main advantage of trading using opposite Bank of America and Shanghai Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Shanghai Broadband 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 Broadband will offset losses from the drop in Shanghai Broadband's long position.| Bank of America vs. Citigroup | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC |
| Shanghai Broadband vs. Zijin Mining Group | Shanghai Broadband vs. Wanhua Chemical Group | Shanghai Broadband vs. Baoshan Iron Steel | Shanghai Broadband vs. Shandong Gold Mining |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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