Correlation Between Bank of America and Nanjing Xinjiekou
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By analyzing existing cross correlation between Bank of America and Nanjing Xinjiekou Department, you can compare the effects of market volatilities on Bank of America and Nanjing Xinjiekou 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 Nanjing Xinjiekou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Nanjing Xinjiekou.
Diversification Opportunities for Bank of America and Nanjing Xinjiekou
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Nanjing is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Nanjing Xinjiekou Department in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Xinjiekou 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 Nanjing Xinjiekou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Xinjiekou has no effect on the direction of Bank of America i.e., Bank of America and Nanjing Xinjiekou go up and down completely randomly.
Pair Corralation between Bank of America and Nanjing Xinjiekou
Considering the 90-day investment horizon Bank of America is expected to generate 0.68 times more return on investment than Nanjing Xinjiekou. However, Bank of America is 1.47 times less risky than Nanjing Xinjiekou. It trades about 0.06 of its potential returns per unit of risk. Nanjing Xinjiekou Department is currently generating about -0.01 per unit of risk. If you would invest 3,085 in Bank of America on August 29, 2024 and sell it today you would earn a total of 1,690 from holding Bank of America or generate 54.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.16% |
| Values | Daily Returns |
Bank of America vs. Nanjing Xinjiekou Department
Performance |
| Timeline |
| Bank of America |
| Nanjing Xinjiekou |
Bank of America and Nanjing Xinjiekou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Nanjing Xinjiekou
The main advantage of trading using opposite Bank of America and Nanjing Xinjiekou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Nanjing Xinjiekou 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 Nanjing Xinjiekou will offset losses from the drop in Nanjing Xinjiekou's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Nanjing Xinjiekou vs. Peoples Insurance of | Nanjing Xinjiekou vs. Nanjing Putian Telecommunications | Nanjing Xinjiekou vs. Allwin Telecommunication Co | Nanjing Xinjiekou vs. Jilin Jlu Communication |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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