Correlation Between Bank of America and Train Alliance
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By analyzing existing cross correlation between Bank of America and Train Alliance Sweden, you can compare the effects of market volatilities on Bank of America and Train Alliance 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 Train Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Train Alliance.
Diversification Opportunities for Bank of America and Train Alliance
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Train is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Train Alliance Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Train Alliance Sweden 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 Train Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Train Alliance Sweden has no effect on the direction of Bank of America i.e., Bank of America and Train Alliance go up and down completely randomly.
Pair Corralation between Bank of America and Train Alliance
Considering the 90-day investment horizon Bank of America is expected to generate 1.65 times more return on investment than Train Alliance. However, Bank of America is 1.65 times more volatile than Train Alliance Sweden. It trades about 0.26 of its potential returns per unit of risk. Train Alliance Sweden is currently generating about -0.38 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 515.00 from holding Bank of America or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Train Alliance Sweden
Performance |
| Timeline |
| Bank of America |
| Train Alliance Sweden |
Bank of America and Train Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Train Alliance
The main advantage of trading using opposite Bank of America and Train Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Train Alliance 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 Train Alliance will offset losses from the drop in Train Alliance'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 |
| Train Alliance vs. Bergman Beving AB | Train Alliance vs. FM Mattsson Mora | Train Alliance vs. Systemair AB | Train Alliance vs. Rejlers AB |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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