Correlation Between Bank of America and LOCKHEED
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By analyzing existing cross correlation between Bank of America and LOCKHEED MARTIN PORATION, you can compare the effects of market volatilities on Bank of America and LOCKHEED 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 LOCKHEED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and LOCKHEED.
Diversification Opportunities for Bank of America and LOCKHEED
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and LOCKHEED is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and LOCKHEED MARTIN PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOCKHEED MARTIN PORATION 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 LOCKHEED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOCKHEED MARTIN PORATION has no effect on the direction of Bank of America i.e., Bank of America and LOCKHEED go up and down completely randomly.
Pair Corralation between Bank of America and LOCKHEED
Considering the 90-day investment horizon Bank of America is expected to generate 101.07 times less return on investment than LOCKHEED. But when comparing it to its historical volatility, Bank of America is 65.71 times less risky than LOCKHEED. It trades about 0.06 of its potential returns per unit of risk. LOCKHEED MARTIN PORATION is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,310 in LOCKHEED MARTIN PORATION on August 27, 2024 and sell it today you would lose (947.00) from holding LOCKHEED MARTIN PORATION or give up 12.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 76.61% |
| Values | Daily Returns |
Bank of America vs. LOCKHEED MARTIN PORATION
Performance |
| Timeline |
| Bank of America |
| LOCKHEED MARTIN PORATION |
Bank of America and LOCKHEED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and LOCKHEED
The main advantage of trading using opposite Bank of America and LOCKHEED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, LOCKHEED 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 LOCKHEED will offset losses from the drop in LOCKHEED's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| LOCKHEED vs. ScanSource | LOCKHEED vs. Mind Technology | LOCKHEED vs. Meiwu Technology Co | LOCKHEED vs. Freedom Internet Group |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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