Correlation Between Bank of America and 30040WAP3
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By analyzing existing cross correlation between Bank of America and ES 3375 01 MAR 32, you can compare the effects of market volatilities on Bank of America and 30040WAP3 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 30040WAP3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 30040WAP3.
Diversification Opportunities for Bank of America and 30040WAP3
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and 30040WAP3 is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and ES 3375 01 MAR 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ES 3375 01 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 30040WAP3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ES 3375 01 has no effect on the direction of Bank of America i.e., Bank of America and 30040WAP3 go up and down completely randomly.
Pair Corralation between Bank of America and 30040WAP3
Considering the 90-day investment horizon Bank of America is expected to generate 2.24 times more return on investment than 30040WAP3. However, Bank of America is 2.24 times more volatile than ES 3375 01 MAR 32. It trades about 0.06 of its potential returns per unit of risk. ES 3375 01 MAR 32 is currently generating about -0.02 per unit of risk. If you would invest 3,114 in Bank of America on August 28, 2024 and sell it today you would earn a total of 1,636 from holding Bank of America or generate 52.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.06% |
| Values | Daily Returns |
Bank of America vs. ES 3375 01 MAR 32
Performance |
| Timeline |
| Bank of America |
| ES 3375 01 |
Bank of America and 30040WAP3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 30040WAP3
The main advantage of trading using opposite Bank of America and 30040WAP3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 30040WAP3 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 30040WAP3 will offset losses from the drop in 30040WAP3's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal | Bank of America vs. Bank of Nova |
| 30040WAP3 vs. Copa Holdings SA | 30040WAP3 vs. Park Ohio Holdings | 30040WAP3 vs. Jacobs Solutions | 30040WAP3 vs. Ryanair Holdings PLC |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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