Correlation Between Bank of America and CARPENTER
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By analyzing existing cross correlation between Bank of America and CARPENTER TECHNOLOGY P, you can compare the effects of market volatilities on Bank of America and CARPENTER 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 CARPENTER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and CARPENTER.
Diversification Opportunities for Bank of America and CARPENTER
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and CARPENTER is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CARPENTER TECHNOLOGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARPENTER TECHNOLOGY 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 CARPENTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARPENTER TECHNOLOGY has no effect on the direction of Bank of America i.e., Bank of America and CARPENTER go up and down completely randomly.
Pair Corralation between Bank of America and CARPENTER
Considering the 90-day investment horizon Bank of America is expected to generate 3.14 times more return on investment than CARPENTER. However, Bank of America is 3.14 times more volatile than CARPENTER TECHNOLOGY P. It trades about 0.12 of its potential returns per unit of risk. CARPENTER TECHNOLOGY P is currently generating about 0.02 per unit of risk. If you would invest 2,771 in Bank of America on September 3, 2024 and sell it today you would earn a total of 1,933 from holding Bank of America or generate 69.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.35% |
| Values | Daily Returns |
Bank of America vs. CARPENTER TECHNOLOGY P
Performance |
| Timeline |
| Bank of America |
| CARPENTER TECHNOLOGY |
Bank of America and CARPENTER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and CARPENTER
The main advantage of trading using opposite Bank of America and CARPENTER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, CARPENTER 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 CARPENTER will offset losses from the drop in CARPENTER'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 |
| CARPENTER vs. GMS Inc | CARPENTER vs. Dolphin Entertainment | CARPENTER vs. Getty Realty | CARPENTER vs. National Vision Holdings |
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 CEOs Directory module to screen CEOs from public companies around the world.
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