Correlation Between Bank of America and NISOURCE
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By analyzing existing cross correlation between Bank of America and NISOURCE FIN P, you can compare the effects of market volatilities on Bank of America and NISOURCE 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 NISOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and NISOURCE.
Diversification Opportunities for Bank of America and NISOURCE
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and NISOURCE is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and NISOURCE FIN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISOURCE FIN P 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 NISOURCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISOURCE FIN P has no effect on the direction of Bank of America i.e., Bank of America and NISOURCE go up and down completely randomly.
Pair Corralation between Bank of America and NISOURCE
Considering the 90-day investment horizon Bank of America is expected to generate 25.49 times less return on investment than NISOURCE. But when comparing it to its historical volatility, Bank of America is 33.76 times less risky than NISOURCE. It trades about 0.06 of its potential returns per unit of risk. NISOURCE FIN P is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,291 in NISOURCE FIN P on September 3, 2024 and sell it today you would lose (474.00) from holding NISOURCE FIN P or give up 5.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 73.13% |
| Values | Daily Returns |
Bank of America vs. NISOURCE FIN P
Performance |
| Timeline |
| Bank of America |
| NISOURCE FIN P |
Bank of America and NISOURCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and NISOURCE
The main advantage of trading using opposite Bank of America and NISOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, NISOURCE 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 NISOURCE will offset losses from the drop in NISOURCE's long position.| Bank of America vs. Partner Communications | Bank of America vs. Merck Company | Bank of America vs. Western Midstream Partners | Bank of America vs. Edgewise Therapeutics |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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