Correlation Between Bank of America and HCL Technologies
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By analyzing existing cross correlation between Bank of America and HCL Technologies Limited, you can compare the effects of market volatilities on Bank of America and HCL Technologies 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 HCL Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and HCL Technologies.
Diversification Opportunities for Bank of America and HCL Technologies
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and HCL is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and HCL Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCL Technologies 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 HCL Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCL Technologies has no effect on the direction of Bank of America i.e., Bank of America and HCL Technologies go up and down completely randomly.
Pair Corralation between Bank of America and HCL Technologies
Considering the 90-day investment horizon Bank of America is expected to generate 1.78 times more return on investment than HCL Technologies. However, Bank of America is 1.78 times more volatile than HCL Technologies Limited. It trades about -0.15 of its potential returns per unit of risk. HCL Technologies Limited is currently generating about -0.27 per unit of risk. If you would invest 4,089 in Bank of America on January 13, 2025 and sell it today you would lose (494.00) from holding Bank of America or give up 12.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 86.36% |
| Values | Daily Returns |
Bank of America vs. HCL Technologies Limited
Performance |
| Timeline |
| Bank of America |
| HCL Technologies |
Bank of America and HCL Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and HCL Technologies
The main advantage of trading using opposite Bank of America and HCL Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, HCL Technologies 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 HCL Technologies will offset losses from the drop in HCL Technologies' long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| HCL Technologies vs. Page Industries Limited | HCL Technologies vs. Oracle Financial Services | HCL Technologies vs. Procter Gamble Hygiene | HCL Technologies vs. MRF Limited |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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