Correlation Between Bank of America and 03740LAD4
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By analyzing existing cross correlation between Bank of America and AON 285 28 MAY 27, you can compare the effects of market volatilities on Bank of America and 03740LAD4 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 03740LAD4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 03740LAD4.
Diversification Opportunities for Bank of America and 03740LAD4
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and 03740LAD4 is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and AON 285 28 MAY 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AON 285 28 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 03740LAD4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AON 285 28 has no effect on the direction of Bank of America i.e., Bank of America and 03740LAD4 go up and down completely randomly.
Pair Corralation between Bank of America and 03740LAD4
Considering the 90-day investment horizon Bank of America is expected to generate 5.24 times more return on investment than 03740LAD4. However, Bank of America is 5.24 times more volatile than AON 285 28 MAY 27. It trades about 0.06 of its potential returns per unit of risk. AON 285 28 MAY 27 is currently generating about 0.04 per unit of risk. If you would invest 2,881 in Bank of America on November 29, 2024 and sell it today you would earn a total of 1,531 from holding Bank of America or generate 53.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.94% |
| Values | Daily Returns |
Bank of America vs. AON 285 28 MAY 27
Performance |
| Timeline |
| Bank of America |
| AON 285 28 |
Bank of America and 03740LAD4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 03740LAD4
The main advantage of trading using opposite Bank of America and 03740LAD4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 03740LAD4 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 03740LAD4 will offset losses from the drop in 03740LAD4'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. Royal Bank of |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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