Correlation Between Bank of America and 74166NAA2
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By analyzing existing cross correlation between Bank of America and ADT Corp 4875, you can compare the effects of market volatilities on Bank of America and 74166NAA2 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 74166NAA2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 74166NAA2.
Diversification Opportunities for Bank of America and 74166NAA2
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and 74166NAA2 is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and ADT Corp 4875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADT Corp 4875 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 74166NAA2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADT Corp 4875 has no effect on the direction of Bank of America i.e., Bank of America and 74166NAA2 go up and down completely randomly.
Pair Corralation between Bank of America and 74166NAA2
Considering the 90-day investment horizon Bank of America is expected to generate 1.8 times more return on investment than 74166NAA2. However, Bank of America is 1.8 times more volatile than ADT Corp 4875. It trades about 0.13 of its potential returns per unit of risk. ADT Corp 4875 is currently generating about 0.03 per unit of risk. If you would invest 2,990 in Bank of America on August 26, 2024 and sell it today you would earn a total of 1,710 from holding Bank of America or generate 57.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 92.77% |
| Values | Daily Returns |
Bank of America vs. ADT Corp 4875
Performance |
| Timeline |
| Bank of America |
| ADT Corp 4875 |
Bank of America and 74166NAA2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 74166NAA2
The main advantage of trading using opposite Bank of America and 74166NAA2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 74166NAA2 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 74166NAA2 will offset losses from the drop in 74166NAA2's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| 74166NAA2 vs. The Coca Cola | 74166NAA2 vs. JPMorgan Chase Co | 74166NAA2 vs. Dupont De Nemours | 74166NAA2 vs. Alcoa Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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