Correlation Between Bank of America and HONEYWELL
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By analyzing existing cross correlation between Bank of America and HONEYWELL INTL INC, you can compare the effects of market volatilities on Bank of America and HONEYWELL 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 HONEYWELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and HONEYWELL.
Diversification Opportunities for Bank of America and HONEYWELL
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and HONEYWELL is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and HONEYWELL INTL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HONEYWELL INTL 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 HONEYWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HONEYWELL INTL INC has no effect on the direction of Bank of America i.e., Bank of America and HONEYWELL go up and down completely randomly.
Pair Corralation between Bank of America and HONEYWELL
Considering the 90-day investment horizon Bank of America is expected to generate 1.8 times more return on investment than HONEYWELL. However, Bank of America is 1.8 times more volatile than HONEYWELL INTL INC. It trades about 0.06 of its potential returns per unit of risk. HONEYWELL INTL INC is currently generating about -0.01 per unit of risk. If you would invest 3,114 in Bank of America on August 28, 2024 and sell it today you would earn a total of 1,636 from holding Bank of America or generate 52.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 76.57% |
| Values | Daily Returns |
Bank of America vs. HONEYWELL INTL INC
Performance |
| Timeline |
| Bank of America |
| HONEYWELL INTL INC |
Bank of America and HONEYWELL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and HONEYWELL
The main advantage of trading using opposite Bank of America and HONEYWELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, HONEYWELL 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 HONEYWELL will offset losses from the drop in HONEYWELL's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal | Bank of America vs. Bank of Nova |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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