Correlation Between Bank of America and Bajaj Healthcare
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By analyzing existing cross correlation between Bank of America and Bajaj Healthcare Limited, you can compare the effects of market volatilities on Bank of America and Bajaj Healthcare 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 Bajaj Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Bajaj Healthcare.
Diversification Opportunities for Bank of America and Bajaj Healthcare
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Bajaj is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Bajaj Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bajaj Healthcare 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 Bajaj Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bajaj Healthcare has no effect on the direction of Bank of America i.e., Bank of America and Bajaj Healthcare go up and down completely randomly.
Pair Corralation between Bank of America and Bajaj Healthcare
Considering the 90-day investment horizon Bank of America is expected to generate 0.52 times more return on investment than Bajaj Healthcare. However, Bank of America is 1.91 times less risky than Bajaj Healthcare. It trades about 0.1 of its potential returns per unit of risk. Bajaj Healthcare Limited is currently generating about 0.04 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 | Insignificant |
| Accuracy | 97.86% |
| Values | Daily Returns |
Bank of America vs. Bajaj Healthcare Limited
Performance |
| Timeline |
| Bank of America |
| Bajaj Healthcare |
Bank of America and Bajaj Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Bajaj Healthcare
The main advantage of trading using opposite Bank of America and Bajaj Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Bajaj Healthcare 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 Bajaj Healthcare will offset losses from the drop in Bajaj Healthcare'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 |
| Bajaj Healthcare vs. MRF Limited | Bajaj Healthcare vs. Honeywell Automation India | Bajaj Healthcare vs. Page Industries Limited | Bajaj Healthcare vs. 3M India Limited |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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