Correlation Between Bank of America and MCBRAC
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By analyzing existing cross correlation between Bank of America and MCBRAC 725 30 JUN 31, you can compare the effects of market volatilities on Bank of America and MCBRAC 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 MCBRAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and MCBRAC.
Diversification Opportunities for Bank of America and MCBRAC
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and MCBRAC is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and MCBRAC 725 30 JUN 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCBRAC 725 30 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 MCBRAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCBRAC 725 30 has no effect on the direction of Bank of America i.e., Bank of America and MCBRAC go up and down completely randomly.
Pair Corralation between Bank of America and MCBRAC
Considering the 90-day investment horizon Bank of America is expected to generate 1.23 times less return on investment than MCBRAC. But when comparing it to its historical volatility, Bank of America is 1.64 times less risky than MCBRAC. It trades about 0.31 of its potential returns per unit of risk. MCBRAC 725 30 JUN 31 is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 8,484 in MCBRAC 725 30 JUN 31 on September 1, 2024 and sell it today you would earn a total of 441.00 from holding MCBRAC 725 30 JUN 31 or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 33.33% |
| Values | Daily Returns |
Bank of America vs. MCBRAC 725 30 JUN 31
Performance |
| Timeline |
| Bank of America |
| MCBRAC 725 30 |
Bank of America and MCBRAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and MCBRAC
The main advantage of trading using opposite Bank of America and MCBRAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, MCBRAC 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 MCBRAC will offset losses from the drop in MCBRAC's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| MCBRAC vs. Bassett Furniture Industries | MCBRAC vs. LENSAR Inc | MCBRAC vs. Live Ventures | MCBRAC vs. Cardinal Health |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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