Correlation Between Bank of America and 210518DN3
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By analyzing existing cross correlation between Bank of America and CMS 265 15 AUG 52, you can compare the effects of market volatilities on Bank of America and 210518DN3 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 210518DN3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 210518DN3.
Diversification Opportunities for Bank of America and 210518DN3
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and 210518DN3 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CMS 265 15 AUG 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMS 265 15 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 210518DN3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMS 265 15 has no effect on the direction of Bank of America i.e., Bank of America and 210518DN3 go up and down completely randomly.
Pair Corralation between Bank of America and 210518DN3
Considering the 90-day investment horizon Bank of America is expected to generate 1.56 times more return on investment than 210518DN3. However, Bank of America is 1.56 times more volatile than CMS 265 15 AUG 52. It trades about 0.31 of its potential returns per unit of risk. CMS 265 15 AUG 52 is currently generating about 0.06 per unit of risk. If you would invest 4,182 in Bank of America on September 1, 2024 and sell it today you would earn a total of 569.00 from holding Bank of America or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 57.14% |
| Values | Daily Returns |
Bank of America vs. CMS 265 15 AUG 52
Performance |
| Timeline |
| Bank of America |
| CMS 265 15 |
Bank of America and 210518DN3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 210518DN3
The main advantage of trading using opposite Bank of America and 210518DN3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 210518DN3 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 210518DN3 will offset losses from the drop in 210518DN3's long position.| Bank of America vs. Citigroup | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
| 210518DN3 vs. ATT Inc | 210518DN3 vs. Home Depot | 210518DN3 vs. Cisco Systems | 210518DN3 vs. Dupont De Nemours |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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