Correlation Between Bank of America and Shanghai Rural
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By analyzing existing cross correlation between Bank of America and Shanghai Rural Commercial, you can compare the effects of market volatilities on Bank of America and Shanghai Rural 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 Rural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Shanghai Rural.
Diversification Opportunities for Bank of America and Shanghai Rural
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Shanghai is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Shanghai Rural Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rural Commercial 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 Rural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rural Commercial has no effect on the direction of Bank of America i.e., Bank of America and Shanghai Rural go up and down completely randomly.
Pair Corralation between Bank of America and Shanghai Rural
Considering the 90-day investment horizon Bank of America is expected to generate 1.15 times less return on investment than Shanghai Rural. In addition to that, Bank of America is 1.16 times more volatile than Shanghai Rural Commercial. It trades about 0.06 of its total potential returns per unit of risk. Shanghai Rural Commercial is currently generating about 0.08 per unit of volatility. If you would invest 509.00 in Shanghai Rural Commercial on September 3, 2024 and sell it today you would earn a total of 323.00 from holding Shanghai Rural Commercial or generate 63.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.36% |
| Values | Daily Returns |
Bank of America vs. Shanghai Rural Commercial
Performance |
| Timeline |
| Bank of America |
| Shanghai Rural Commercial |
Bank of America and Shanghai Rural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Shanghai Rural
The main advantage of trading using opposite Bank of America and Shanghai Rural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Shanghai Rural 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 Rural will offset losses from the drop in Shanghai Rural'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 |
| Shanghai Rural vs. Dezhan HealthCare Co | Shanghai Rural vs. Yunnan Jianzhijia Health Chain | Shanghai Rural vs. Anhui Transport Consulting | Shanghai Rural vs. Longjian Road Bridge |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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