Correlation Between Bank of America and FEDEX
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By analyzing existing cross correlation between Bank of America and FEDEX P 475, you can compare the effects of market volatilities on Bank of America and FEDEX 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 FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and FEDEX.
Diversification Opportunities for Bank of America and FEDEX
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and FEDEX is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and FEDEX P 475 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 475 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 FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 475 has no effect on the direction of Bank of America i.e., Bank of America and FEDEX go up and down completely randomly.
Pair Corralation between Bank of America and FEDEX
Considering the 90-day investment horizon Bank of America is expected to generate 1.11 times more return on investment than FEDEX. However, Bank of America is 1.11 times more volatile than FEDEX P 475. It trades about 0.27 of its potential returns per unit of risk. FEDEX P 475 is currently generating about 0.02 per unit of risk. If you would invest 4,253 in Bank of America on August 30, 2024 and sell it today you would earn a total of 524.00 from holding Bank of America or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. FEDEX P 475
Performance |
| Timeline |
| Bank of America |
| FEDEX P 475 |
Bank of America and FEDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and FEDEX
The main advantage of trading using opposite Bank of America and FEDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, FEDEX 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 FEDEX will offset losses from the drop in FEDEX'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 |
| FEDEX vs. Arrow Electronics | FEDEX vs. Nextnav Acquisition Corp | FEDEX vs. Lipocine | FEDEX vs. Red Branch Technologies |
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 Directory module to find actively traded commodities issued by global exchanges.
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