Correlation Between Bank of America and 281020AT4
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By analyzing existing cross correlation between Bank of America and EIX 5, you can compare the effects of market volatilities on Bank of America and 281020AT4 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 281020AT4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 281020AT4.
Diversification Opportunities for Bank of America and 281020AT4
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and 281020AT4 is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and EIX 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 281020AT4 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 281020AT4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 281020AT4 has no effect on the direction of Bank of America i.e., Bank of America and 281020AT4 go up and down completely randomly.
Pair Corralation between Bank of America and 281020AT4
Considering the 90-day investment horizon Bank of America is expected to generate 0.49 times more return on investment than 281020AT4. However, Bank of America is 2.06 times less risky than 281020AT4. It trades about 0.29 of its potential returns per unit of risk. EIX 5 is currently generating about -0.21 per unit of risk. If you would invest 4,231 in Bank of America on August 31, 2024 and sell it today you would earn a total of 546.00 from holding Bank of America or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. EIX 5
Performance |
| Timeline |
| Bank of America |
| 281020AT4 |
Bank of America and 281020AT4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 281020AT4
The main advantage of trading using opposite Bank of America and 281020AT4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 281020AT4 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 281020AT4 will offset losses from the drop in 281020AT4's long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
| 281020AT4 vs. Kaiser Aluminum | 281020AT4 vs. CECO Environmental Corp | 281020AT4 vs. Algoma Steel Group | 281020AT4 vs. Evertz Technologies Limited |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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