Correlation Between Bank of America and NATIONAL
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By analyzing existing cross correlation between Bank of America and NATIONAL RURAL UTILS, you can compare the effects of market volatilities on Bank of America and NATIONAL 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 NATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and NATIONAL.
Diversification Opportunities for Bank of America and NATIONAL
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and NATIONAL is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and NATIONAL RURAL UTILS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL RURAL UTILS 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 NATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATIONAL RURAL UTILS has no effect on the direction of Bank of America i.e., Bank of America and NATIONAL go up and down completely randomly.
Pair Corralation between Bank of America and NATIONAL
Considering the 90-day investment horizon Bank of America is expected to generate 1.89 times more return on investment than NATIONAL. However, Bank of America is 1.89 times more volatile than NATIONAL RURAL UTILS. It trades about 0.31 of its potential returns per unit of risk. NATIONAL RURAL UTILS is currently generating about 0.04 per unit of risk. If you would invest 4,182 in Bank of America on September 1, 2024 and sell it today you would earn a total of 569.00 from holding Bank of America or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Bank of America vs. NATIONAL RURAL UTILS
Performance |
| Timeline |
| Bank of America |
| NATIONAL RURAL UTILS |
Bank of America and NATIONAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and NATIONAL
The main advantage of trading using opposite Bank of America and NATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, NATIONAL 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 NATIONAL will offset losses from the drop in NATIONAL's long position.| Bank of America vs. Citigroup | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
| NATIONAL vs. Academy Sports Outdoors | NATIONAL vs. Life Time Group | NATIONAL vs. LithiumBank Resources Corp | NATIONAL vs. Sonos Inc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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