Correlation Between Bank of America and PROCTER
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By analyzing existing cross correlation between Bank of America and PROCTER GAMBLE 35, you can compare the effects of market volatilities on Bank of America and PROCTER 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 PROCTER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and PROCTER.
Diversification Opportunities for Bank of America and PROCTER
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and PROCTER is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and PROCTER GAMBLE 35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROCTER GAMBLE 35 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 PROCTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROCTER GAMBLE 35 has no effect on the direction of Bank of America i.e., Bank of America and PROCTER go up and down completely randomly.
Pair Corralation between Bank of America and PROCTER
Considering the 90-day investment horizon Bank of America is expected to generate 1.82 times less return on investment than PROCTER. But when comparing it to its historical volatility, Bank of America is 1.92 times less risky than PROCTER. It trades about 0.27 of its potential returns per unit of risk. PROCTER GAMBLE 35 is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 7,997 in PROCTER GAMBLE 35 on August 30, 2024 and sell it today you would earn a total of 901.00 from holding PROCTER GAMBLE 35 or generate 11.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 52.17% |
| Values | Daily Returns |
Bank of America vs. PROCTER GAMBLE 35
Performance |
| Timeline |
| Bank of America |
| PROCTER GAMBLE 35 |
Bank of America and PROCTER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and PROCTER
The main advantage of trading using opposite Bank of America and PROCTER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, PROCTER 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 PROCTER will offset losses from the drop in PROCTER's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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