Correlation Between Bank of America and 59523UAP2
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By analyzing existing cross correlation between Bank of America and MID AMERICA APTS L, you can compare the effects of market volatilities on Bank of America and 59523UAP2 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 59523UAP2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 59523UAP2.
Diversification Opportunities for Bank of America and 59523UAP2
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and 59523UAP2 is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and MID AMERICA APTS L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MID AMERICA APTS 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 59523UAP2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MID AMERICA APTS has no effect on the direction of Bank of America i.e., Bank of America and 59523UAP2 go up and down completely randomly.
Pair Corralation between Bank of America and 59523UAP2
Considering the 90-day investment horizon Bank of America is expected to generate 29.06 times less return on investment than 59523UAP2. But when comparing it to its historical volatility, Bank of America is 34.96 times less risky than 59523UAP2. It trades about 0.06 of its potential returns per unit of risk. MID AMERICA APTS L is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,715 in MID AMERICA APTS L on August 31, 2024 and sell it today you would lose (75.00) from holding MID AMERICA APTS L or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 69.25% |
| Values | Daily Returns |
Bank of America vs. MID AMERICA APTS L
Performance |
| Timeline |
| Bank of America |
| MID AMERICA APTS |
Bank of America and 59523UAP2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 59523UAP2
The main advantage of trading using opposite Bank of America and 59523UAP2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 59523UAP2 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 59523UAP2 will offset losses from the drop in 59523UAP2's long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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