Correlation Between Bank of America and Harel Index
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By analyzing existing cross correlation between Bank of America and Harel Index Funds, you can compare the effects of market volatilities on Bank of America and Harel Index 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 Harel Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Harel Index.
Diversification Opportunities for Bank of America and Harel Index
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Harel is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Harel Index Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harel Index Funds 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 Harel Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harel Index Funds has no effect on the direction of Bank of America i.e., Bank of America and Harel Index go up and down completely randomly.
Pair Corralation between Bank of America and Harel Index
Considering the 90-day investment horizon Bank of America is expected to generate 14.49 times more return on investment than Harel Index. However, Bank of America is 14.49 times more volatile than Harel Index Funds. It trades about 0.27 of its potential returns per unit of risk. Harel Index Funds is currently generating about 0.74 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 513.00 from holding Bank of America or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 81.82% |
| Values | Daily Returns |
Bank of America vs. Harel Index Funds
Performance |
| Timeline |
| Bank of America |
| Harel Index Funds |
Bank of America and Harel Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Harel Index
The main advantage of trading using opposite Bank of America and Harel Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Harel Index 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 Harel Index will offset losses from the drop in Harel Index's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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