Correlation Between Bank of America and DIGITAL
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By analyzing existing cross correlation between Bank of America and DIGITAL RLTY TR, you can compare the effects of market volatilities on Bank of America and DIGITAL 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 DIGITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and DIGITAL.
Diversification Opportunities for Bank of America and DIGITAL
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and DIGITAL is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and DIGITAL RLTY TR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL RLTY TR 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 DIGITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL RLTY TR has no effect on the direction of Bank of America i.e., Bank of America and DIGITAL go up and down completely randomly.
Pair Corralation between Bank of America and DIGITAL
Considering the 90-day investment horizon Bank of America is expected to generate 3.45 times more return on investment than DIGITAL. However, Bank of America is 3.45 times more volatile than DIGITAL RLTY TR. It trades about 0.12 of its potential returns per unit of risk. DIGITAL RLTY TR is currently generating about -0.01 per unit of risk. If you would invest 3,495 in Bank of America on September 1, 2024 and sell it today you would earn a total of 1,256 from holding Bank of America or generate 35.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.62% |
| Values | Daily Returns |
Bank of America vs. DIGITAL RLTY TR
Performance |
| Timeline |
| Bank of America |
| DIGITAL RLTY TR |
Bank of America and DIGITAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and DIGITAL
The main advantage of trading using opposite Bank of America and DIGITAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, DIGITAL 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 DIGITAL will offset losses from the drop in DIGITAL's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| DIGITAL vs. AEP TEX INC | DIGITAL vs. US BANK NATIONAL | DIGITAL vs. American Express | DIGITAL vs. Chevron 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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