Correlation Between Bank of America and NETAPP
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By analyzing existing cross correlation between Bank of America and NETAPP INC, you can compare the effects of market volatilities on Bank of America and NETAPP 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 NETAPP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and NETAPP.
Diversification Opportunities for Bank of America and NETAPP
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and NETAPP is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and NETAPP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETAPP 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 NETAPP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETAPP INC has no effect on the direction of Bank of America i.e., Bank of America and NETAPP go up and down completely randomly.
Pair Corralation between Bank of America and NETAPP
Considering the 90-day investment horizon Bank of America is expected to generate 1.9 times more return on investment than NETAPP. However, Bank of America is 1.9 times more volatile than NETAPP INC. It trades about 0.16 of its potential returns per unit of risk. NETAPP INC is currently generating about -0.12 per unit of risk. If you would invest 3,951 in Bank of America on August 23, 2024 and sell it today you would earn a total of 695.00 from holding Bank of America or generate 17.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
Bank of America vs. NETAPP INC
Performance |
| Timeline |
| Bank of America |
| NETAPP INC |
Bank of America and NETAPP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and NETAPP
The main advantage of trading using opposite Bank of America and NETAPP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, NETAPP 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 NETAPP will offset losses from the drop in NETAPP's long position.| Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of | Bank of America vs. JPMorgan Chase Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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