Correlation Between Bank of America and SCOTTS
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By analyzing existing cross correlation between Bank of America and SCOTTS MIRACLE GRO 45, you can compare the effects of market volatilities on Bank of America and SCOTTS 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 SCOTTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and SCOTTS.
Diversification Opportunities for Bank of America and SCOTTS
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and SCOTTS is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and SCOTTS MIRACLE GRO 45 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTTS MIRACLE GRO 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 SCOTTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTTS MIRACLE GRO has no effect on the direction of Bank of America i.e., Bank of America and SCOTTS go up and down completely randomly.
Pair Corralation between Bank of America and SCOTTS
Considering the 90-day investment horizon Bank of America is expected to generate 0.86 times more return on investment than SCOTTS. However, Bank of America is 1.16 times less risky than SCOTTS. It trades about 0.27 of its potential returns per unit of risk. SCOTTS MIRACLE GRO 45 is currently generating about -0.16 per unit of risk. If you would invest 4,262 in Bank of America on August 28, 2024 and sell it today you would earn a total of 513.00 from holding Bank of America or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. SCOTTS MIRACLE GRO 45
Performance |
| Timeline |
| Bank of America |
| SCOTTS MIRACLE GRO |
Bank of America and SCOTTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and SCOTTS
The main advantage of trading using opposite Bank of America and SCOTTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, SCOTTS 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 SCOTTS will offset losses from the drop in SCOTTS's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| SCOTTS vs. The Coca Cola | SCOTTS vs. JPMorgan Chase Co | SCOTTS vs. Dupont De Nemours | SCOTTS 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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