Correlation Between Bank of America and JOHNSON
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By analyzing existing cross correlation between Bank of America and JOHNSON JOHNSON, you can compare the effects of market volatilities on Bank of America and JOHNSON 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 JOHNSON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and JOHNSON.
Diversification Opportunities for Bank of America and JOHNSON
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and JOHNSON is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and JOHNSON JOHNSON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JOHNSON JOHNSON 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 JOHNSON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JOHNSON JOHNSON has no effect on the direction of Bank of America i.e., Bank of America and JOHNSON go up and down completely randomly.
Pair Corralation between Bank of America and JOHNSON
Considering the 90-day investment horizon Bank of America is expected to generate 0.66 times more return on investment than JOHNSON. However, Bank of America is 1.51 times less risky than JOHNSON. It trades about 0.05 of its potential returns per unit of risk. JOHNSON JOHNSON is currently generating about -0.21 per unit of risk. If you would invest 4,653 in Bank of America on November 18, 2024 and sell it today you would earn a total of 43.00 from holding Bank of America or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bank of America vs. JOHNSON JOHNSON
Performance |
| Timeline |
| Bank of America |
| JOHNSON JOHNSON |
Bank of America and JOHNSON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and JOHNSON
The main advantage of trading using opposite Bank of America and JOHNSON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, JOHNSON 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 JOHNSON will offset losses from the drop in JOHNSON's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| JOHNSON vs. Mesa Air Group | JOHNSON vs. Copa Holdings SA | JOHNSON vs. Procter Gamble | JOHNSON vs. Eastman Kodak Co |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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