Correlation Between Bank of America and ArcelorMittal
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By analyzing existing cross correlation between Bank of America and ArcelorMittal 455 percent, you can compare the effects of market volatilities on Bank of America and ArcelorMittal 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 ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and ArcelorMittal.
Diversification Opportunities for Bank of America and ArcelorMittal
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and ArcelorMittal is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and ArcelorMittal 455 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal 455 percent 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 ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal 455 percent has no effect on the direction of Bank of America i.e., Bank of America and ArcelorMittal go up and down completely randomly.
Pair Corralation between Bank of America and ArcelorMittal
Considering the 90-day investment horizon Bank of America is expected to generate 1.66 times more return on investment than ArcelorMittal. However, Bank of America is 1.66 times more volatile than ArcelorMittal 455 percent. It trades about 0.29 of its potential returns per unit of risk. ArcelorMittal 455 percent is currently generating about -0.04 per unit of risk. If you would invest 4,231 in Bank of America on August 31, 2024 and sell it today you would earn a total of 546.00 from holding Bank of America or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. ArcelorMittal 455 percent
Performance |
| Timeline |
| Bank of America |
| ArcelorMittal 455 percent |
Bank of America and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and ArcelorMittal
The main advantage of trading using opposite Bank of America and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal's long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
| ArcelorMittal vs. Western Digital | ArcelorMittal vs. Barrick Gold Corp | ArcelorMittal vs. Amkor Technology | ArcelorMittal vs. Yuexiu Transport Infrastructure |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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