Correlation Between Bank of America and 48242WAC0
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By analyzing existing cross correlation between Bank of America and KBR INC 475, you can compare the effects of market volatilities on Bank of America and 48242WAC0 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 48242WAC0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 48242WAC0.
Diversification Opportunities for Bank of America and 48242WAC0
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and 48242WAC0 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and KBR INC 475 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBR INC 475 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 48242WAC0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBR INC 475 has no effect on the direction of Bank of America i.e., Bank of America and 48242WAC0 go up and down completely randomly.
Pair Corralation between Bank of America and 48242WAC0
Considering the 90-day investment horizon Bank of America is expected to generate 112.82 times less return on investment than 48242WAC0. But when comparing it to its historical volatility, Bank of America is 71.92 times less risky than 48242WAC0. It trades about 0.06 of its potential returns per unit of risk. KBR INC 475 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8,897 in KBR INC 475 on August 30, 2024 and sell it today you would earn a total of 295.00 from holding KBR INC 475 or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 47.98% |
| Values | Daily Returns |
Bank of America vs. KBR INC 475
Performance |
| Timeline |
| Bank of America |
| KBR INC 475 |
Bank of America and 48242WAC0 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 48242WAC0
The main advantage of trading using opposite Bank of America and 48242WAC0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 48242WAC0 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 48242WAC0 will offset losses from the drop in 48242WAC0's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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