Correlation Between Bank of America and ARCHER
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By analyzing existing cross correlation between Bank of America and ARCHER DANIELS MIDLAND 45, you can compare the effects of market volatilities on Bank of America and ARCHER 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 ARCHER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and ARCHER.
Diversification Opportunities for Bank of America and ARCHER
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and ARCHER is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and ARCHER DANIELS MIDLAND 45 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARCHER DANIELS MIDLAND 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 ARCHER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARCHER DANIELS MIDLAND has no effect on the direction of Bank of America i.e., Bank of America and ARCHER go up and down completely randomly.
Pair Corralation between Bank of America and ARCHER
Considering the 90-day investment horizon Bank of America is expected to generate 1.08 times more return on investment than ARCHER. However, Bank of America is 1.08 times more volatile than ARCHER DANIELS MIDLAND 45. It trades about 0.12 of its potential returns per unit of risk. ARCHER DANIELS MIDLAND 45 is currently generating about 0.11 per unit of risk. If you would invest 3,722 in Bank of America on September 3, 2024 and sell it today you would earn a total of 1,029 from holding Bank of America or generate 27.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 46.58% |
| Values | Daily Returns |
Bank of America vs. ARCHER DANIELS MIDLAND 45
Performance |
| Timeline |
| Bank of America |
| ARCHER DANIELS MIDLAND |
Bank of America and ARCHER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and ARCHER
The main advantage of trading using opposite Bank of America and ARCHER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, ARCHER 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 ARCHER will offset losses from the drop in ARCHER's long position.| Bank of America vs. Partner Communications | Bank of America vs. Merck Company | Bank of America vs. Western Midstream Partners | Bank of America vs. Edgewise Therapeutics |
| ARCHER vs. Stagwell | ARCHER vs. Diageo PLC ADR | ARCHER vs. Anheuser Busch Inbev | ARCHER vs. National Beverage Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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