Correlation Between Bank of America and 437076BY7
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By analyzing existing cross correlation between Bank of America and HOME DEPOT INC, you can compare the effects of market volatilities on Bank of America and 437076BY7 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 437076BY7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 437076BY7.
Diversification Opportunities for Bank of America and 437076BY7
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and 437076BY7 is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and HOME DEPOT INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOME DEPOT 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 437076BY7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOME DEPOT INC has no effect on the direction of Bank of America i.e., Bank of America and 437076BY7 go up and down completely randomly.
Pair Corralation between Bank of America and 437076BY7
Considering the 90-day investment horizon Bank of America is expected to generate 3.73 times more return on investment than 437076BY7. However, Bank of America is 3.73 times more volatile than HOME DEPOT INC. It trades about 0.12 of its potential returns per unit of risk. HOME DEPOT INC is currently generating about 0.0 per unit of risk. If you would invest 3,409 in Bank of America on August 27, 2024 and sell it today you would earn a total of 1,291 from holding Bank of America or generate 37.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. HOME DEPOT INC
Performance |
| Timeline |
| Bank of America |
| HOME DEPOT INC |
Bank of America and 437076BY7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 437076BY7
The main advantage of trading using opposite Bank of America and 437076BY7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 437076BY7 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 437076BY7 will offset losses from the drop in 437076BY7's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| 437076BY7 vs. The Coca Cola | 437076BY7 vs. JPMorgan Chase Co | 437076BY7 vs. Dupont De Nemours | 437076BY7 vs. Alcoa Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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