Correlation Between Bank of America and COMMERCIAL BANK
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By analyzing existing cross correlation between Bank of America and COMMERCIAL BANK OF, you can compare the effects of market volatilities on Bank of America and COMMERCIAL BANK 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 COMMERCIAL BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and COMMERCIAL BANK.
Diversification Opportunities for Bank of America and COMMERCIAL BANK
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and COMMERCIAL is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and COMMERCIAL BANK OF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMMERCIAL BANK 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 COMMERCIAL BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMMERCIAL BANK has no effect on the direction of Bank of America i.e., Bank of America and COMMERCIAL BANK go up and down completely randomly.
Pair Corralation between Bank of America and COMMERCIAL BANK
Considering the 90-day investment horizon Bank of America is expected to generate 2.0 times less return on investment than COMMERCIAL BANK. But when comparing it to its historical volatility, Bank of America is 1.45 times less risky than COMMERCIAL BANK. It trades about 0.06 of its potential returns per unit of risk. COMMERCIAL BANK OF is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,240 in COMMERCIAL BANK OF on September 2, 2024 and sell it today you would earn a total of 5,250 from holding COMMERCIAL BANK OF or generate 123.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.77% |
| Values | Daily Returns |
Bank of America vs. COMMERCIAL BANK OF
Performance |
| Timeline |
| Bank of America |
| COMMERCIAL BANK |
Bank of America and COMMERCIAL BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and COMMERCIAL BANK
The main advantage of trading using opposite Bank of America and COMMERCIAL BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, COMMERCIAL BANK 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 COMMERCIAL BANK will offset losses from the drop in COMMERCIAL BANK's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| COMMERCIAL BANK vs. Convenience Foods PLC | COMMERCIAL BANK vs. Arpico Insurance | COMMERCIAL BANK vs. Lanka Realty Investments | COMMERCIAL BANK vs. Ceylon Hospitals PLC |
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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