Correlation Between Bank of America and CITIGROUP
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By analyzing existing cross correlation between Bank of America and CITIGROUP INC, you can compare the effects of market volatilities on Bank of America and CITIGROUP 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 CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and CITIGROUP.
Diversification Opportunities for Bank of America and CITIGROUP
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and CITIGROUP is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CITIGROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC 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 CITIGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP INC has no effect on the direction of Bank of America i.e., Bank of America and CITIGROUP go up and down completely randomly.
Pair Corralation between Bank of America and CITIGROUP
Considering the 90-day investment horizon Bank of America is expected to generate 1.71 times more return on investment than CITIGROUP. However, Bank of America is 1.71 times more volatile than CITIGROUP INC. It trades about 0.22 of its potential returns per unit of risk. CITIGROUP INC is currently generating about -0.3 per unit of risk. If you would invest 4,265 in Bank of America on August 25, 2024 and sell it today you would earn a total of 435.00 from holding Bank of America or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. CITIGROUP INC
Performance |
| Timeline |
| Bank of America |
| CITIGROUP INC |
Bank of America and CITIGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and CITIGROUP
The main advantage of trading using opposite Bank of America and CITIGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, CITIGROUP 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 CITIGROUP will offset losses from the drop in CITIGROUP's long position.| Bank of America vs. Amtech Systems | Bank of America vs. Gold Fields Ltd | Bank of America vs. Aegean Airlines SA | Bank of America vs. Merck Company |
| CITIGROUP vs. WEBTOON Entertainment Common | CITIGROUP vs. Pearson PLC ADR | CITIGROUP vs. Saia Inc | CITIGROUP vs. Fossil Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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