Correlation Between Bank of America and 64828TAA0
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By analyzing existing cross correlation between Bank of America and NEW RESIDENTIAL INVT, you can compare the effects of market volatilities on Bank of America and 64828TAA0 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 64828TAA0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 64828TAA0.
Diversification Opportunities for Bank of America and 64828TAA0
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and 64828TAA0 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and NEW RESIDENTIAL INVT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW RESIDENTIAL INVT 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 64828TAA0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW RESIDENTIAL INVT has no effect on the direction of Bank of America i.e., Bank of America and 64828TAA0 go up and down completely randomly.
Pair Corralation between Bank of America and 64828TAA0
Considering the 90-day investment horizon Bank of America is expected to generate 1.2 times more return on investment than 64828TAA0. However, Bank of America is 1.2 times more volatile than NEW RESIDENTIAL INVT. It trades about 0.26 of its potential returns per unit of risk. NEW RESIDENTIAL INVT is currently generating about -0.26 per unit of risk. If you would invest 4,262 in Bank of America on August 28, 2024 and sell it today you would earn a total of 488.00 from holding Bank of America or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 66.67% |
| Values | Daily Returns |
Bank of America vs. NEW RESIDENTIAL INVT
Performance |
| Timeline |
| Bank of America |
| NEW RESIDENTIAL INVT |
Bank of America and 64828TAA0 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 64828TAA0
The main advantage of trading using opposite Bank of America and 64828TAA0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 64828TAA0 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 64828TAA0 will offset losses from the drop in 64828TAA0'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 |
| 64828TAA0 vs. Tesla Inc | 64828TAA0 vs. Pinterest | 64828TAA0 vs. AMCON Distributing | 64828TAA0 vs. WiMi Hologram Cloud |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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