Correlation Between Bank of America and Dupont De
Can any of the company-specific risk be diversified away by investing in both Bank of America and Dupont De at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank of America and Dupont De into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Dupont De Nemours, you can compare the effects of market volatilities on Bank of America and Dupont De 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 Dupont De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Dupont De.
Diversification Opportunities for Bank of America and Dupont De
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Dupont is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Dupont De Nemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dupont De Nemours 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 Dupont De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dupont De Nemours has no effect on the direction of Bank of America i.e., Bank of America and Dupont De go up and down completely randomly.
Pair Corralation between Bank of America and Dupont De
Considering the 90-day investment horizon Bank of America is expected to generate 1.26 times more return on investment than Dupont De. However, Bank of America is 1.26 times more volatile than Dupont De Nemours. It trades about 0.32 of its potential returns per unit of risk. Dupont De Nemours is currently generating about 0.05 per unit of risk. If you would invest 4,176 in Bank of America on September 2, 2024 and sell it today you would earn a total of 575.00 from holding Bank of America or generate 13.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Dupont De Nemours
Performance |
| Timeline |
| Bank of America |
| Dupont De Nemours |
Bank of America and Dupont De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Dupont De
The main advantage of trading using opposite Bank of America and Dupont De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Dupont De 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 Dupont De will offset losses from the drop in Dupont De'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 |
| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |