Correlation Between Bank of America and PHILIP
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By analyzing existing cross correlation between Bank of America and PHILIP MORRIS INTERNATIONAL, you can compare the effects of market volatilities on Bank of America and PHILIP 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 PHILIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and PHILIP.
Diversification Opportunities for Bank of America and PHILIP
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and PHILIP is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and PHILIP MORRIS INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHILIP MORRIS INTERN 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 PHILIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHILIP MORRIS INTERN has no effect on the direction of Bank of America i.e., Bank of America and PHILIP go up and down completely randomly.
Pair Corralation between Bank of America and PHILIP
Considering the 90-day investment horizon Bank of America is expected to generate 2.17 times more return on investment than PHILIP. However, Bank of America is 2.17 times more volatile than PHILIP MORRIS INTERNATIONAL. It trades about 0.06 of its potential returns per unit of risk. PHILIP MORRIS INTERNATIONAL is currently generating about 0.05 per unit of risk. If you would invest 3,115 in Bank of America on September 3, 2024 and sell it today you would earn a total of 1,636 from holding Bank of America or generate 52.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.34% |
| Values | Daily Returns |
Bank of America vs. PHILIP MORRIS INTERNATIONAL
Performance |
| Timeline |
| Bank of America |
| PHILIP MORRIS INTERN |
Bank of America and PHILIP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and PHILIP
The main advantage of trading using opposite Bank of America and PHILIP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, PHILIP 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 PHILIP will offset losses from the drop in PHILIP'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 |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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