Correlation Between Bank of America and HOSPITALITY
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By analyzing existing cross correlation between Bank of America and HOSPITALITY PPTYS TR, you can compare the effects of market volatilities on Bank of America and HOSPITALITY 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 HOSPITALITY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and HOSPITALITY.
Diversification Opportunities for Bank of America and HOSPITALITY
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and HOSPITALITY is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and HOSPITALITY PPTYS TR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOSPITALITY PPTYS 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 HOSPITALITY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOSPITALITY PPTYS has no effect on the direction of Bank of America i.e., Bank of America and HOSPITALITY go up and down completely randomly.
Pair Corralation between Bank of America and HOSPITALITY
Considering the 90-day investment horizon Bank of America is expected to generate 1.99 times more return on investment than HOSPITALITY. However, Bank of America is 1.99 times more volatile than HOSPITALITY PPTYS TR. It trades about 0.13 of its potential returns per unit of risk. HOSPITALITY PPTYS TR is currently generating about 0.05 per unit of risk. If you would invest 3,036 in Bank of America on September 3, 2024 and sell it today you would earn a total of 1,668 from holding Bank of America or generate 54.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.76% |
| Values | Daily Returns |
Bank of America vs. HOSPITALITY PPTYS TR
Performance |
| Timeline |
| Bank of America |
| HOSPITALITY PPTYS |
Bank of America and HOSPITALITY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and HOSPITALITY
The main advantage of trading using opposite Bank of America and HOSPITALITY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, HOSPITALITY 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 HOSPITALITY will offset losses from the drop in HOSPITALITY's long position.| Bank of America vs. Partner Communications | Bank of America vs. Merck Company | Bank of America vs. Western Midstream Partners | Bank of America vs. Edgewise Therapeutics |
| HOSPITALITY vs. AEP TEX INC | HOSPITALITY vs. US BANK NATIONAL | HOSPITALITY vs. Jackson Financial | HOSPITALITY vs. MetLife |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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