Correlation Between Bank of America and Elpitiya Plantations
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By analyzing existing cross correlation between Bank of America and Elpitiya Plantations PLC, you can compare the effects of market volatilities on Bank of America and Elpitiya Plantations 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 Elpitiya Plantations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Elpitiya Plantations.
Diversification Opportunities for Bank of America and Elpitiya Plantations
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Elpitiya is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Elpitiya Plantations PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elpitiya Plantations PLC 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 Elpitiya Plantations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elpitiya Plantations PLC has no effect on the direction of Bank of America i.e., Bank of America and Elpitiya Plantations go up and down completely randomly.
Pair Corralation between Bank of America and Elpitiya Plantations
Considering the 90-day investment horizon Bank of America is expected to generate 1.17 times less return on investment than Elpitiya Plantations. But when comparing it to its historical volatility, Bank of America is 1.09 times less risky than Elpitiya Plantations. It trades about 0.16 of its potential returns per unit of risk. Elpitiya Plantations PLC is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 9,100 in Elpitiya Plantations PLC on September 2, 2024 and sell it today you would earn a total of 1,750 from holding Elpitiya Plantations PLC or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 93.75% |
| Values | Daily Returns |
Bank of America vs. Elpitiya Plantations PLC
Performance |
| Timeline |
| Bank of America |
| Elpitiya Plantations PLC |
Bank of America and Elpitiya Plantations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Elpitiya Plantations
The main advantage of trading using opposite Bank of America and Elpitiya Plantations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Elpitiya Plantations 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 Elpitiya Plantations will offset losses from the drop in Elpitiya Plantations' 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 |
| Elpitiya Plantations vs. HVA Foods PLC | Elpitiya Plantations vs. Convenience Foods PLC | Elpitiya Plantations vs. Aitken Spence Hotel | Elpitiya Plantations vs. Ceylon Beverage Holdings |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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