Correlation Between Bank of America and Keurig
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By analyzing existing cross correlation between Bank of America and Keurig Dr Pepper, you can compare the effects of market volatilities on Bank of America and Keurig 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 Keurig. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Keurig.
Diversification Opportunities for Bank of America and Keurig
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Keurig is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Keurig Dr Pepper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keurig Dr Pepper 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 Keurig. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keurig Dr Pepper has no effect on the direction of Bank of America i.e., Bank of America and Keurig go up and down completely randomly.
Pair Corralation between Bank of America and Keurig
Considering the 90-day investment horizon Bank of America is expected to generate 3.69 times more return on investment than Keurig. However, Bank of America is 3.69 times more volatile than Keurig Dr Pepper. It trades about 0.29 of its potential returns per unit of risk. Keurig Dr Pepper is currently generating about -0.13 per unit of risk. If you would invest 4,231 in Bank of America on August 31, 2024 and sell it today you would earn a total of 546.00 from holding Bank of America or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. Keurig Dr Pepper
Performance |
| Timeline |
| Bank of America |
| Keurig Dr Pepper |
Bank of America and Keurig Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Keurig
The main advantage of trading using opposite Bank of America and Keurig positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Keurig 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 Keurig will offset losses from the drop in Keurig'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 |
| Keurig vs. AEP TEX INC | Keurig vs. US BANK NATIONAL | Keurig vs. FactSet Research Systems | Keurig vs. Aurora Innovation |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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