Correlation Between Bank of America and ENBCN
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By analyzing existing cross correlation between Bank of America and ENBCN 16 04 OCT 26, you can compare the effects of market volatilities on Bank of America and ENBCN 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 ENBCN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and ENBCN.
Diversification Opportunities for Bank of America and ENBCN
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and ENBCN is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and ENBCN 16 04 OCT 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENBCN 16 04 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 ENBCN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENBCN 16 04 has no effect on the direction of Bank of America i.e., Bank of America and ENBCN go up and down completely randomly.
Pair Corralation between Bank of America and ENBCN
Considering the 90-day investment horizon Bank of America is expected to generate 4.03 times more return on investment than ENBCN. However, Bank of America is 4.03 times more volatile than ENBCN 16 04 OCT 26. It trades about 0.06 of its potential returns per unit of risk. ENBCN 16 04 OCT 26 is currently generating about 0.01 per unit of risk. If you would invest 3,113 in Bank of America on September 2, 2024 and sell it today you would earn a total of 1,638 from holding Bank of America or generate 52.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.53% |
| Values | Daily Returns |
Bank of America vs. ENBCN 16 04 OCT 26
Performance |
| Timeline |
| Bank of America |
| ENBCN 16 04 |
Bank of America and ENBCN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and ENBCN
The main advantage of trading using opposite Bank of America and ENBCN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, ENBCN 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 ENBCN will offset losses from the drop in ENBCN'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 |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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