Correlation Between Bank of America and 260543CG6
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By analyzing existing cross correlation between Bank of America and DOW CHEM 4375, you can compare the effects of market volatilities on Bank of America and 260543CG6 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 260543CG6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 260543CG6.
Diversification Opportunities for Bank of America and 260543CG6
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and 260543CG6 is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and DOW CHEM 4375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOW CHEM 4375 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 260543CG6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOW CHEM 4375 has no effect on the direction of Bank of America i.e., Bank of America and 260543CG6 go up and down completely randomly.
Pair Corralation between Bank of America and 260543CG6
Considering the 90-day investment horizon Bank of America is expected to generate 1.75 times more return on investment than 260543CG6. However, Bank of America is 1.75 times more volatile than DOW CHEM 4375. It trades about 0.25 of its potential returns per unit of risk. DOW CHEM 4375 is currently generating about -0.01 per unit of risk. If you would invest 3,968 in Bank of America on August 30, 2024 and sell it today you would earn a total of 809.00 from holding Bank of America or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Bank of America vs. DOW CHEM 4375
Performance |
| Timeline |
| Bank of America |
| DOW CHEM 4375 |
Bank of America and 260543CG6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 260543CG6
The main advantage of trading using opposite Bank of America and 260543CG6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 260543CG6 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 260543CG6 will offset losses from the drop in 260543CG6's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
| 260543CG6 vs. AEP TEX INC | 260543CG6 vs. US BANK NATIONAL | 260543CG6 vs. Nasdaq Inc | 260543CG6 vs. Vertiv Holdings Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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