Correlation Between Bank of America and 66977WAP4
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By analyzing existing cross correlation between Bank of America and Nova Chemicals 5, you can compare the effects of market volatilities on Bank of America and 66977WAP4 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 66977WAP4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 66977WAP4.
Diversification Opportunities for Bank of America and 66977WAP4
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and 66977WAP4 is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Nova Chemicals 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Chemicals 5 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 66977WAP4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Chemicals 5 has no effect on the direction of Bank of America i.e., Bank of America and 66977WAP4 go up and down completely randomly.
Pair Corralation between Bank of America and 66977WAP4
Considering the 90-day investment horizon Bank of America is expected to generate 28.18 times less return on investment than 66977WAP4. But when comparing it to its historical volatility, Bank of America is 35.39 times less risky than 66977WAP4. It trades about 0.06 of its potential returns per unit of risk. Nova Chemicals 5 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,605 in Nova Chemicals 5 on September 2, 2024 and sell it today you would earn a total of 295.00 from holding Nova Chemicals 5 or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.53% |
| Values | Daily Returns |
Bank of America vs. Nova Chemicals 5
Performance |
| Timeline |
| Bank of America |
| Nova Chemicals 5 |
Bank of America and 66977WAP4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 66977WAP4
The main advantage of trading using opposite Bank of America and 66977WAP4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 66977WAP4 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 66977WAP4 will offset losses from the drop in 66977WAP4's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| 66977WAP4 vs. AEP TEX INC | 66977WAP4 vs. US BANK NATIONAL | 66977WAP4 vs. Bank of America | 66977WAP4 vs. GE Aerospace |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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