Correlation Between Bank of America and APACHE
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By analyzing existing cross correlation between Bank of America and APACHE P 525, you can compare the effects of market volatilities on Bank of America and APACHE 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 APACHE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and APACHE.
Diversification Opportunities for Bank of America and APACHE
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and APACHE is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and APACHE P 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APACHE P 525 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 APACHE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APACHE P 525 has no effect on the direction of Bank of America i.e., Bank of America and APACHE go up and down completely randomly.
Pair Corralation between Bank of America and APACHE
Considering the 90-day investment horizon Bank of America is expected to generate 1.14 times more return on investment than APACHE. However, Bank of America is 1.14 times more volatile than APACHE P 525. It trades about 0.06 of its potential returns per unit of risk. APACHE P 525 is currently generating about 0.01 per unit of risk. If you would invest 3,272 in Bank of America on August 28, 2024 and sell it today you would earn a total of 1,478 from holding Bank of America or generate 45.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 67.02% |
| Values | Daily Returns |
Bank of America vs. APACHE P 525
Performance |
| Timeline |
| Bank of America |
| APACHE P 525 |
Bank of America and APACHE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and APACHE
The main advantage of trading using opposite Bank of America and APACHE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, APACHE 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 APACHE will offset losses from the drop in APACHE's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| APACHE vs. Arrow Electronics | APACHE vs. Sphere Entertainment Co | APACHE vs. Cedar Realty Trust | APACHE vs. Radcom |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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