Correlation Between Bank of America and MASTERCARD
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By analyzing existing cross correlation between Bank of America and MASTERCARD INC, you can compare the effects of market volatilities on Bank of America and MASTERCARD 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 MASTERCARD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and MASTERCARD.
Diversification Opportunities for Bank of America and MASTERCARD
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and MASTERCARD is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and MASTERCARD INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MASTERCARD INC 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 MASTERCARD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MASTERCARD INC has no effect on the direction of Bank of America i.e., Bank of America and MASTERCARD go up and down completely randomly.
Pair Corralation between Bank of America and MASTERCARD
Considering the 90-day investment horizon Bank of America is expected to generate 1.83 times more return on investment than MASTERCARD. However, Bank of America is 1.83 times more volatile than MASTERCARD INC. It trades about 0.25 of its potential returns per unit of risk. MASTERCARD INC is currently generating about -0.03 per unit of risk. If you would invest 3,952 in Bank of America on August 27, 2024 and sell it today you would earn a total of 798.00 from holding Bank of America or generate 20.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Bank of America vs. MASTERCARD INC
Performance |
| Timeline |
| Bank of America |
| MASTERCARD INC |
Bank of America and MASTERCARD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and MASTERCARD
The main advantage of trading using opposite Bank of America and MASTERCARD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, MASTERCARD 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 MASTERCARD will offset losses from the drop in MASTERCARD's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal | Bank of America vs. Bank of Nova |
| MASTERCARD vs. SunOpta | MASTERCARD vs. Pool Corporation | MASTERCARD vs. LB Foster | MASTERCARD vs. Kite Realty 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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