Correlation Between Bank of America and GENERAL
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By analyzing existing cross correlation between Bank of America and GENERAL ELEC CAP, you can compare the effects of market volatilities on Bank of America and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and GENERAL.
Diversification Opportunities for Bank of America and GENERAL
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and GENERAL is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and GENERAL ELEC CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL ELEC CAP 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL ELEC CAP has no effect on the direction of Bank of America i.e., Bank of America and GENERAL go up and down completely randomly.
Pair Corralation between Bank of America and GENERAL
Considering the 90-day investment horizon Bank of America is expected to generate 2.14 times more return on investment than GENERAL. However, Bank of America is 2.14 times more volatile than GENERAL ELEC CAP. It trades about 0.16 of its potential returns per unit of risk. GENERAL ELEC CAP is currently generating about 0.03 per unit of risk. If you would invest 4,044 in Bank of America on September 2, 2024 and sell it today you would earn a total of 707.00 from holding Bank of America or generate 17.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 54.69% |
| Values | Daily Returns |
Bank of America vs. GENERAL ELEC CAP
Performance |
| Timeline |
| Bank of America |
| GENERAL ELEC CAP |
Bank of America and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and GENERAL
The main advantage of trading using opposite Bank of America and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL'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 |
| GENERAL vs. Sabre Corpo | GENERAL vs. Papaya Growth Opportunity | GENERAL vs. Balchem | GENERAL vs. Axalta Coating Systems |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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