Correlation Between Bank of America and INTERNATIONAL
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By analyzing existing cross correlation between Bank of America and INTERNATIONAL PAPER 44, you can compare the effects of market volatilities on Bank of America and INTERNATIONAL 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 INTERNATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and INTERNATIONAL.
Diversification Opportunities for Bank of America and INTERNATIONAL
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and INTERNATIONAL is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and INTERNATIONAL PAPER 44 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNATIONAL PAPER 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 INTERNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNATIONAL PAPER has no effect on the direction of Bank of America i.e., Bank of America and INTERNATIONAL go up and down completely randomly.
Pair Corralation between Bank of America and INTERNATIONAL
Considering the 90-day investment horizon Bank of America is expected to generate 1.35 times more return on investment than INTERNATIONAL. However, Bank of America is 1.35 times more volatile than INTERNATIONAL PAPER 44. It trades about 0.1 of its potential returns per unit of risk. INTERNATIONAL PAPER 44 is currently generating about 0.06 per unit of risk. If you would invest 3,938 in Bank of America on August 31, 2024 and sell it today you would earn a total of 813.00 from holding Bank of America or generate 20.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 55.12% |
| Values | Daily Returns |
Bank of America vs. INTERNATIONAL PAPER 44
Performance |
| Timeline |
| Bank of America |
| INTERNATIONAL PAPER |
Bank of America and INTERNATIONAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and INTERNATIONAL
The main advantage of trading using opposite Bank of America and INTERNATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, INTERNATIONAL 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 INTERNATIONAL will offset losses from the drop in INTERNATIONAL'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 |
| INTERNATIONAL vs. AEP TEX INC | INTERNATIONAL vs. US BANK NATIONAL | INTERNATIONAL vs. Bank of America | INTERNATIONAL vs. GE Aerospace |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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