Correlation Between Bank of America and 47233JDK1
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By analyzing existing cross correlation between Bank of America and US47233JDK16, you can compare the effects of market volatilities on Bank of America and 47233JDK1 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 47233JDK1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 47233JDK1.
Diversification Opportunities for Bank of America and 47233JDK1
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and 47233JDK1 is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and US47233JDK16 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US47233JDK16 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 47233JDK1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US47233JDK16 has no effect on the direction of Bank of America i.e., Bank of America and 47233JDK1 go up and down completely randomly.
Pair Corralation between Bank of America and 47233JDK1
Considering the 90-day investment horizon Bank of America is expected to generate 0.57 times more return on investment than 47233JDK1. However, Bank of America is 1.76 times less risky than 47233JDK1. It trades about 0.1 of its potential returns per unit of risk. US47233JDK16 is currently generating about 0.02 per unit of risk. If you would invest 2,824 in Bank of America on September 1, 2024 and sell it today you would earn a total of 1,927 from holding Bank of America or generate 68.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 37.37% |
| Values | Daily Returns |
Bank of America vs. US47233JDK16
Performance |
| Timeline |
| Bank of America |
| US47233JDK16 |
Bank of America and 47233JDK1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 47233JDK1
The main advantage of trading using opposite Bank of America and 47233JDK1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 47233JDK1 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 47233JDK1 will offset losses from the drop in 47233JDK1's long position.| Bank of America vs. Citigroup | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
| 47233JDK1 vs. Pool Corporation | 47233JDK1 vs. Asbury Automotive Group | 47233JDK1 vs. GoHealth | 47233JDK1 vs. Aegon NV ADR |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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