Correlation Between Bank of America and JPM USD
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By analyzing existing cross correlation between Bank of America and JPM USD Ultra Short, you can compare the effects of market volatilities on Bank of America and JPM USD 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 JPM USD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and JPM USD.
Diversification Opportunities for Bank of America and JPM USD
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and JPM is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and JPM USD Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM USD Ultra 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 JPM USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM USD Ultra has no effect on the direction of Bank of America i.e., Bank of America and JPM USD go up and down completely randomly.
Pair Corralation between Bank of America and JPM USD
Considering the 90-day investment horizon Bank of America is expected to generate 3.47 times more return on investment than JPM USD. However, Bank of America is 3.47 times more volatile than JPM USD Ultra Short. It trades about 0.32 of its potential returns per unit of risk. JPM USD Ultra Short is currently generating about 0.34 per unit of risk. If you would invest 4,133 in Bank of America on September 3, 2024 and sell it today you would earn a total of 571.00 from holding Bank of America or generate 13.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bank of America vs. JPM USD Ultra Short
Performance |
| Timeline |
| Bank of America |
| JPM USD Ultra |
Bank of America and JPM USD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and JPM USD
The main advantage of trading using opposite Bank of America and JPM USD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, JPM USD 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 JPM USD will offset losses from the drop in JPM USD'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 |
| JPM USD vs. UBS Fund Solutions | JPM USD vs. Xtrackers II | JPM USD vs. Xtrackers Nikkei 225 | JPM USD vs. iShares VII PLC |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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