Correlation Between Bank of America and 126650DL1
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By analyzing existing cross correlation between Bank of America and CVS HEALTH P, you can compare the effects of market volatilities on Bank of America and 126650DL1 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 126650DL1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 126650DL1.
Diversification Opportunities for Bank of America and 126650DL1
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and 126650DL1 is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CVS HEALTH P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS HEALTH P 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 126650DL1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS HEALTH P has no effect on the direction of Bank of America i.e., Bank of America and 126650DL1 go up and down completely randomly.
Pair Corralation between Bank of America and 126650DL1
Considering the 90-day investment horizon Bank of America is expected to generate 0.66 times more return on investment than 126650DL1. However, Bank of America is 1.52 times less risky than 126650DL1. It trades about 0.26 of its potential returns per unit of risk. CVS HEALTH P is currently generating about 0.05 per unit of risk. If you would invest 4,262 in Bank of America on August 28, 2024 and sell it today you would earn a total of 488.00 from holding Bank of America or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Bank of America vs. CVS HEALTH P
Performance |
| Timeline |
| Bank of America |
| CVS HEALTH P |
Bank of America and 126650DL1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 126650DL1
The main advantage of trading using opposite Bank of America and 126650DL1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 126650DL1 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 126650DL1 will offset losses from the drop in 126650DL1's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| 126650DL1 vs. The Coca Cola | 126650DL1 vs. JPMorgan Chase Co | 126650DL1 vs. Dupont De Nemours | 126650DL1 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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