Correlation Between Bank of America and CONOCO
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By analyzing existing cross correlation between Bank of America and CONOCO FDG 725, you can compare the effects of market volatilities on Bank of America and CONOCO 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 CONOCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and CONOCO.
Diversification Opportunities for Bank of America and CONOCO
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and CONOCO is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CONOCO FDG 725 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONOCO FDG 725 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 CONOCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONOCO FDG 725 has no effect on the direction of Bank of America i.e., Bank of America and CONOCO go up and down completely randomly.
Pair Corralation between Bank of America and CONOCO
Considering the 90-day investment horizon Bank of America is expected to generate 3.02 times more return on investment than CONOCO. However, Bank of America is 3.02 times more volatile than CONOCO FDG 725. It trades about 0.18 of its potential returns per unit of risk. CONOCO FDG 725 is currently generating about -0.17 per unit of risk. If you would invest 3,969 in Bank of America on August 28, 2024 and sell it today you would earn a total of 781.00 from holding Bank of America or generate 19.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Bank of America vs. CONOCO FDG 725
Performance |
| Timeline |
| Bank of America |
| CONOCO FDG 725 |
Bank of America and CONOCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and CONOCO
The main advantage of trading using opposite Bank of America and CONOCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, CONOCO 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 CONOCO will offset losses from the drop in CONOCO's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal | Bank of America vs. Bank of Nova |
| CONOCO vs. AEP TEX INC | CONOCO vs. US BANK NATIONAL | CONOCO vs. Eat Beyond Global | CONOCO vs. Charles Schwab 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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