Correlation Between Bank of America and ENTERPRISE
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By analyzing existing cross correlation between Bank of America and ENTERPRISE PRODUCTS OPERATING, you can compare the effects of market volatilities on Bank of America and ENTERPRISE 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 ENTERPRISE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and ENTERPRISE.
Diversification Opportunities for Bank of America and ENTERPRISE
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and ENTERPRISE is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and ENTERPRISE PRODUCTS OPERATING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENTERPRISE PRODUCTS 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 ENTERPRISE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENTERPRISE PRODUCTS has no effect on the direction of Bank of America i.e., Bank of America and ENTERPRISE go up and down completely randomly.
Pair Corralation between Bank of America and ENTERPRISE
Considering the 90-day investment horizon Bank of America is expected to generate 2.33 times more return on investment than ENTERPRISE. However, Bank of America is 2.33 times more volatile than ENTERPRISE PRODUCTS OPERATING. It trades about 0.26 of its potential returns per unit of risk. ENTERPRISE PRODUCTS OPERATING is currently generating about 0.14 per unit of risk. If you would invest 4,262 in Bank of America on August 29, 2024 and sell it today you would earn a total of 515.00 from holding Bank of America or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 82.61% |
| Values | Daily Returns |
Bank of America vs. ENTERPRISE PRODUCTS OPERATING
Performance |
| Timeline |
| Bank of America |
| ENTERPRISE PRODUCTS |
Bank of America and ENTERPRISE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and ENTERPRISE
The main advantage of trading using opposite Bank of America and ENTERPRISE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, ENTERPRISE 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 ENTERPRISE will offset losses from the drop in ENTERPRISE's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. JPMorgan Chase Co |
| ENTERPRISE vs. Cumberland Pharmaceuticals | ENTERPRISE vs. Aldel Financial II | ENTERPRISE vs. Papaya Growth Opportunity | ENTERPRISE vs. Chester Mining |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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