Correlation Between Bank of America and 594918BK9
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By analyzing existing cross correlation between Bank of America and MICROSOFT P 42, you can compare the effects of market volatilities on Bank of America and 594918BK9 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 594918BK9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 594918BK9.
Diversification Opportunities for Bank of America and 594918BK9
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and 594918BK9 is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and MICROSOFT P 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICROSOFT P 42 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 594918BK9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICROSOFT P 42 has no effect on the direction of Bank of America i.e., Bank of America and 594918BK9 go up and down completely randomly.
Pair Corralation between Bank of America and 594918BK9
Considering the 90-day investment horizon Bank of America is expected to generate 1.95 times more return on investment than 594918BK9. However, Bank of America is 1.95 times more volatile than MICROSOFT P 42. It trades about 0.11 of its potential returns per unit of risk. MICROSOFT P 42 is currently generating about 0.02 per unit of risk. If you would invest 2,797 in Bank of America on September 12, 2024 and sell it today you would earn a total of 1,802 from holding Bank of America or generate 64.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Bank of America vs. MICROSOFT P 42
Performance |
| Timeline |
| Bank of America |
| MICROSOFT P 42 |
Bank of America and 594918BK9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 594918BK9
The main advantage of trading using opposite Bank of America and 594918BK9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 594918BK9 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 594918BK9 will offset losses from the drop in 594918BK9's long position.| Bank of America vs. JPMorgan Chase Co | Bank of America vs. Victory Integrity Smallmid Cap | Bank of America vs. Hilton Worldwide Holdings | Bank of America vs. NVIDIA |
| 594918BK9 vs. Alaska Air Group | 594918BK9 vs. Eldorado Gold Corp | 594918BK9 vs. Forsys Metals Corp | 594918BK9 vs. Air Lease |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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