Correlation Between Bank of America and 42225UAF1
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By analyzing existing cross correlation between Bank of America and HEALTHCARE TR AMER, you can compare the effects of market volatilities on Bank of America and 42225UAF1 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 42225UAF1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 42225UAF1.
Diversification Opportunities for Bank of America and 42225UAF1
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and 42225UAF1 is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and HEALTHCARE TR AMER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE TR AMER 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 42225UAF1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE TR AMER has no effect on the direction of Bank of America i.e., Bank of America and 42225UAF1 go up and down completely randomly.
Pair Corralation between Bank of America and 42225UAF1
Considering the 90-day investment horizon Bank of America is expected to generate 2.44 times more return on investment than 42225UAF1. However, Bank of America is 2.44 times more volatile than HEALTHCARE TR AMER. It trades about 0.31 of its potential returns per unit of risk. HEALTHCARE TR AMER is currently generating about -0.19 per unit of risk. If you would invest 4,182 in Bank of America on September 1, 2024 and sell it today you would earn a total of 569.00 from holding Bank of America or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Bank of America vs. HEALTHCARE TR AMER
Performance |
| Timeline |
| Bank of America |
| HEALTHCARE TR AMER |
Bank of America and 42225UAF1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 42225UAF1
The main advantage of trading using opposite Bank of America and 42225UAF1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 42225UAF1 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 42225UAF1 will offset losses from the drop in 42225UAF1'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 |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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