Correlation Between Bank of America and MASSMU
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By analyzing existing cross correlation between Bank of America and MASSMU 215 09 MAR 31, you can compare the effects of market volatilities on Bank of America and MASSMU 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 MASSMU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and MASSMU.
Diversification Opportunities for Bank of America and MASSMU
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and MASSMU is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and MASSMU 215 09 MAR 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MASSMU 215 09 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 MASSMU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MASSMU 215 09 has no effect on the direction of Bank of America i.e., Bank of America and MASSMU go up and down completely randomly.
Pair Corralation between Bank of America and MASSMU
Considering the 90-day investment horizon Bank of America is expected to generate 1.65 times more return on investment than MASSMU. However, Bank of America is 1.65 times more volatile than MASSMU 215 09 MAR 31. It trades about 0.1 of its potential returns per unit of risk. MASSMU 215 09 MAR 31 is currently generating about 0.16 per unit of risk. If you would invest 3,938 in Bank of America on September 1, 2024 and sell it today you would earn a total of 813.00 from holding Bank of America or generate 20.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 13.49% |
| Values | Daily Returns |
Bank of America vs. MASSMU 215 09 MAR 31
Performance |
| Timeline |
| Bank of America |
| MASSMU 215 09 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and MASSMU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and MASSMU
The main advantage of trading using opposite Bank of America and MASSMU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, MASSMU 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 MASSMU will offset losses from the drop in MASSMU'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 |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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