Correlation Between Bank of America and NOVARTIS
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By analyzing existing cross correlation between Bank of America and NOVARTIS CAPITAL P, you can compare the effects of market volatilities on Bank of America and NOVARTIS 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 NOVARTIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and NOVARTIS.
Diversification Opportunities for Bank of America and NOVARTIS
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and NOVARTIS is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and NOVARTIS CAPITAL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVARTIS CAPITAL 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 NOVARTIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVARTIS CAPITAL P has no effect on the direction of Bank of America i.e., Bank of America and NOVARTIS go up and down completely randomly.
Pair Corralation between Bank of America and NOVARTIS
Considering the 90-day investment horizon Bank of America is expected to under-perform the NOVARTIS. But the stock apears to be less risky and, when comparing its historical volatility, Bank of America is 2.69 times less risky than NOVARTIS. The stock trades about -0.16 of its potential returns per unit of risk. The NOVARTIS CAPITAL P is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,511 in NOVARTIS CAPITAL P on September 18, 2024 and sell it today you would earn a total of 380.00 from holding NOVARTIS CAPITAL P or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Bank of America vs. NOVARTIS CAPITAL P
Performance |
| Timeline |
| Bank of America |
| NOVARTIS CAPITAL P |
Bank of America and NOVARTIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and NOVARTIS
The main advantage of trading using opposite Bank of America and NOVARTIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, NOVARTIS 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 NOVARTIS will offset losses from the drop in NOVARTIS's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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