Correlation Between Bank of America and BOEING
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By analyzing existing cross correlation between Bank of America and BOEING CO, you can compare the effects of market volatilities on Bank of America and BOEING 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 BOEING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and BOEING.
Diversification Opportunities for Bank of America and BOEING
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and BOEING is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and BOEING CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOEING CO 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 BOEING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOEING CO has no effect on the direction of Bank of America i.e., Bank of America and BOEING go up and down completely randomly.
Pair Corralation between Bank of America and BOEING
Considering the 90-day investment horizon Bank of America is expected to generate 60.47 times less return on investment than BOEING. But when comparing it to its historical volatility, Bank of America is 51.95 times less risky than BOEING. It trades about 0.06 of its potential returns per unit of risk. BOEING CO is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,277 in BOEING CO on September 1, 2024 and sell it today you would lose (532.00) from holding BOEING CO or give up 7.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 92.32% |
| Values | Daily Returns |
Bank of America vs. BOEING CO
Performance |
| Timeline |
| Bank of America |
| BOEING CO |
Bank of America and BOEING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and BOEING
The main advantage of trading using opposite Bank of America and BOEING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, BOEING 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 BOEING will offset losses from the drop in BOEING's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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