Correlation Between Bank of America and CHARTER
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By analyzing existing cross correlation between Bank of America and CHARTER MUNICATIONS OPERATING, you can compare the effects of market volatilities on Bank of America and CHARTER 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 CHARTER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and CHARTER.
Diversification Opportunities for Bank of America and CHARTER
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and CHARTER is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CHARTER MUNICATIONS OPERATING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHARTER MUNICATIONS 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 CHARTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHARTER MUNICATIONS has no effect on the direction of Bank of America i.e., Bank of America and CHARTER go up and down completely randomly.
Pair Corralation between Bank of America and CHARTER
Considering the 90-day investment horizon Bank of America is expected to generate 1.3 times less return on investment than CHARTER. But when comparing it to its historical volatility, Bank of America is 2.0 times less risky than CHARTER. It trades about 0.05 of its potential returns per unit of risk. CHARTER MUNICATIONS OPERATING is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8,449 in CHARTER MUNICATIONS OPERATING on November 18, 2024 and sell it today you would earn a total of 81.00 from holding CHARTER MUNICATIONS OPERATING or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. CHARTER MUNICATIONS OPERATING
Performance |
| Timeline |
| Bank of America |
| CHARTER MUNICATIONS |
Bank of America and CHARTER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and CHARTER
The main advantage of trading using opposite Bank of America and CHARTER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, CHARTER 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 CHARTER will offset losses from the drop in CHARTER's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| CHARTER vs. AEP TEX INC | CHARTER vs. Bank of America | CHARTER vs. Dupont De Nemours | CHARTER vs. Pfizer Inc |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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