Correlation Between Bank of America and Convenience Foods
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By analyzing existing cross correlation between Bank of America and Convenience Foods PLC, you can compare the effects of market volatilities on Bank of America and Convenience Foods 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 Convenience Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Convenience Foods.
Diversification Opportunities for Bank of America and Convenience Foods
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Convenience is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Convenience Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Convenience Foods 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 Convenience Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Convenience Foods PLC has no effect on the direction of Bank of America i.e., Bank of America and Convenience Foods go up and down completely randomly.
Pair Corralation between Bank of America and Convenience Foods
Considering the 90-day investment horizon Bank of America is expected to generate 1.38 times more return on investment than Convenience Foods. However, Bank of America is 1.38 times more volatile than Convenience Foods PLC. It trades about 0.32 of its potential returns per unit of risk. Convenience Foods PLC is currently generating about 0.17 per unit of risk. If you would invest 4,176 in Bank of America on September 2, 2024 and sell it today you would earn a total of 575.00 from holding Bank of America or generate 13.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bank of America vs. Convenience Foods PLC
Performance |
| Timeline |
| Bank of America |
| Convenience Foods PLC |
Bank of America and Convenience Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Convenience Foods
The main advantage of trading using opposite Bank of America and Convenience Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Convenience Foods 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 Convenience Foods will offset losses from the drop in Convenience Foods' 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 |
| Convenience Foods vs. Seylan Bank PLC | Convenience Foods vs. Pan Asia Banking | Convenience Foods vs. HDFC Bank of | Convenience Foods vs. DFCC Bank 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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