Correlation Between Bank of America and GILEAD
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By analyzing existing cross correlation between Bank of America and GILEAD SCIENCES INC, you can compare the effects of market volatilities on Bank of America and GILEAD 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 GILEAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and GILEAD.
Diversification Opportunities for Bank of America and GILEAD
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and GILEAD is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and GILEAD SCIENCES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GILEAD SCIENCES INC 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 GILEAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GILEAD SCIENCES INC has no effect on the direction of Bank of America i.e., Bank of America and GILEAD go up and down completely randomly.
Pair Corralation between Bank of America and GILEAD
Considering the 90-day investment horizon Bank of America is expected to generate 3.32 times more return on investment than GILEAD. However, Bank of America is 3.32 times more volatile than GILEAD SCIENCES INC. It trades about 0.1 of its potential returns per unit of risk. GILEAD SCIENCES INC is currently generating about 0.02 per unit of risk. If you would invest 2,820 in Bank of America on August 31, 2024 and sell it today you would earn a total of 1,931 from holding Bank of America or generate 68.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.66% |
| Values | Daily Returns |
Bank of America vs. GILEAD SCIENCES INC
Performance |
| Timeline |
| Bank of America |
| GILEAD SCIENCES INC |
Bank of America and GILEAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and GILEAD
The main advantage of trading using opposite Bank of America and GILEAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, GILEAD 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 GILEAD will offset losses from the drop in GILEAD's long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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