Correlation Between Bank of America and LG DAX
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By analyzing existing cross correlation between Bank of America and LG DAX Daily, you can compare the effects of market volatilities on Bank of America and LG DAX 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 LG DAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and LG DAX.
Diversification Opportunities for Bank of America and LG DAX
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and DES2 is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and LG DAX Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG DAX Daily 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 LG DAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG DAX Daily has no effect on the direction of Bank of America i.e., Bank of America and LG DAX go up and down completely randomly.
Pair Corralation between Bank of America and LG DAX
Considering the 90-day investment horizon Bank of America is expected to generate 0.93 times more return on investment than LG DAX. However, Bank of America is 1.07 times less risky than LG DAX. It trades about 0.16 of its potential returns per unit of risk. LG DAX Daily is currently generating about -0.05 per unit of risk. If you would invest 4,044 in Bank of America on September 3, 2024 and sell it today you would earn a total of 707.00 from holding Bank of America or generate 17.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Bank of America vs. LG DAX Daily
Performance |
| Timeline |
| Bank of America |
| LG DAX Daily |
Bank of America and LG DAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and LG DAX
The main advantage of trading using opposite Bank of America and LG DAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, LG DAX 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 LG DAX will offset losses from the drop in LG DAX'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 |
| LG DAX vs. LG DAX Daily | LG DAX vs. iShares Govt Bond | LG DAX vs. Amundi MSCI Europe | LG DAX vs. iShares Global AAA AA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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