Correlation Between Bank of America and Beta ETF
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By analyzing existing cross correlation between Bank of America and Beta ETF Nasdaq 100, you can compare the effects of market volatilities on Bank of America and Beta ETF 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 Beta ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Beta ETF.
Diversification Opportunities for Bank of America and Beta ETF
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Beta is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Beta ETF Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beta ETF Nasdaq 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 Beta ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beta ETF Nasdaq has no effect on the direction of Bank of America i.e., Bank of America and Beta ETF go up and down completely randomly.
Pair Corralation between Bank of America and Beta ETF
Considering the 90-day investment horizon Bank of America is expected to generate 1.66 times more return on investment than Beta ETF. However, Bank of America is 1.66 times more volatile than Beta ETF Nasdaq 100. It trades about 0.27 of its potential returns per unit of risk. Beta ETF Nasdaq 100 is currently generating about 0.09 per unit of risk. If you would invest 4,262 in Bank of America on August 29, 2024 and sell it today you would earn a total of 523.50 from holding Bank of America or generate 12.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 91.3% |
| Values | Daily Returns |
Bank of America vs. Beta ETF Nasdaq 100
Performance |
| Timeline |
| Bank of America |
| Beta ETF Nasdaq |
Bank of America and Beta ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Beta ETF
The main advantage of trading using opposite Bank of America and Beta ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Beta ETF 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 Beta ETF will offset losses from the drop in Beta ETF's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. JPMorgan Chase Co |
| Beta ETF vs. Beta mWIG40TR Portfelowy | Beta ETF vs. Beta ETF Nasdaq 100 | Beta ETF vs. Beta ETF Nasdaq 100 | Beta ETF vs. Beta WIG20TR Portfelowy |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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