Correlation Between Bank of America and 06406RBA4
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By analyzing existing cross correlation between Bank of America and BK 205 26 JAN 27, you can compare the effects of market volatilities on Bank of America and 06406RBA4 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 06406RBA4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 06406RBA4.
Diversification Opportunities for Bank of America and 06406RBA4
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and 06406RBA4 is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and BK 205 26 JAN 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BK 205 26 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 06406RBA4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BK 205 26 has no effect on the direction of Bank of America i.e., Bank of America and 06406RBA4 go up and down completely randomly.
Pair Corralation between Bank of America and 06406RBA4
Considering the 90-day investment horizon Bank of America is expected to generate 2.56 times more return on investment than 06406RBA4. However, Bank of America is 2.56 times more volatile than BK 205 26 JAN 27. It trades about 0.27 of its potential returns per unit of risk. BK 205 26 JAN 27 is currently generating about -0.32 per unit of risk. If you would invest 4,262 in Bank of America on August 29, 2024 and sell it today you would earn a total of 513.00 from holding Bank of America or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Bank of America vs. BK 205 26 JAN 27
Performance |
| Timeline |
| Bank of America |
| BK 205 26 |
Bank of America and 06406RBA4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 06406RBA4
The main advantage of trading using opposite Bank of America and 06406RBA4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 06406RBA4 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 06406RBA4 will offset losses from the drop in 06406RBA4's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| 06406RBA4 vs. AEP TEX INC | 06406RBA4 vs. US BANK NATIONAL | 06406RBA4 vs. 3M Company | 06406RBA4 vs. Alcoa 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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