Correlation Between Bank of America and AMERICAN
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By analyzing existing cross correlation between Bank of America and AMERICAN EXPRESS 42, you can compare the effects of market volatilities on Bank of America and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and AMERICAN.
Diversification Opportunities for Bank of America and AMERICAN
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and AMERICAN is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and AMERICAN EXPRESS 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN EXPRESS 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN EXPRESS has no effect on the direction of Bank of America i.e., Bank of America and AMERICAN go up and down completely randomly.
Pair Corralation between Bank of America and AMERICAN
Considering the 90-day investment horizon Bank of America is expected to generate 6.14 times more return on investment than AMERICAN. However, Bank of America is 6.14 times more volatile than AMERICAN EXPRESS 42. It trades about 0.16 of its potential returns per unit of risk. AMERICAN EXPRESS 42 is currently generating about -0.08 per unit of risk. If you would invest 4,044 in Bank of America on September 2, 2024 and sell it today you would earn a total of 707.00 from holding Bank of America or generate 17.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
Bank of America vs. AMERICAN EXPRESS 42
Performance |
| Timeline |
| Bank of America |
| AMERICAN EXPRESS |
Bank of America and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and AMERICAN
The main advantage of trading using opposite Bank of America and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's 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 |
| AMERICAN vs. Jacobs Solutions | AMERICAN vs. Jutal Offshore Oil | AMERICAN vs. Equinix | AMERICAN vs. Stepstone Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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