Correlation Between Bank of America and DIAGEO
Specify exactly 2 symbols:
By analyzing existing cross correlation between Bank of America and DIAGEO CAP PLC, you can compare the effects of market volatilities on Bank of America and DIAGEO 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 DIAGEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and DIAGEO.
Diversification Opportunities for Bank of America and DIAGEO
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and DIAGEO is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and DIAGEO CAP PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIAGEO CAP PLC 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 DIAGEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIAGEO CAP PLC has no effect on the direction of Bank of America i.e., Bank of America and DIAGEO go up and down completely randomly.
Pair Corralation between Bank of America and DIAGEO
Considering the 90-day investment horizon Bank of America is expected to generate 1.62 times more return on investment than DIAGEO. However, Bank of America is 1.62 times more volatile than DIAGEO CAP PLC. It trades about 0.18 of its potential returns per unit of risk. DIAGEO CAP PLC is currently generating about 0.02 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 | Very Weak |
| Accuracy | 84.13% |
| Values | Daily Returns |
Bank of America vs. DIAGEO CAP PLC
Performance |
| Timeline |
| Bank of America |
| DIAGEO CAP PLC |
Bank of America and DIAGEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and DIAGEO
The main advantage of trading using opposite Bank of America and DIAGEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, DIAGEO 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 DIAGEO will offset losses from the drop in DIAGEO'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 |
| DIAGEO vs. The Coca Cola | DIAGEO vs. JPMorgan Chase Co | DIAGEO vs. Dupont De Nemours | DIAGEO vs. Alcoa 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |