Correlation Between Bank of America and 816851BM0
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By analyzing existing cross correlation between Bank of America and SRE 4125 01 APR 52, you can compare the effects of market volatilities on Bank of America and 816851BM0 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 816851BM0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 816851BM0.
Diversification Opportunities for Bank of America and 816851BM0
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and 816851BM0 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and SRE 4125 01 APR 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SRE 4125 01 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 816851BM0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SRE 4125 01 has no effect on the direction of Bank of America i.e., Bank of America and 816851BM0 go up and down completely randomly.
Pair Corralation between Bank of America and 816851BM0
Considering the 90-day investment horizon Bank of America is expected to generate 2.24 times more return on investment than 816851BM0. However, Bank of America is 2.24 times more volatile than SRE 4125 01 APR 52. It trades about 0.29 of its potential returns per unit of risk. SRE 4125 01 APR 52 is currently generating about 0.02 per unit of risk. If you would invest 4,231 in Bank of America on August 31, 2024 and sell it today you would earn a total of 546.00 from holding Bank of America or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Bank of America vs. SRE 4125 01 APR 52
Performance |
| Timeline |
| Bank of America |
| SRE 4125 01 |
Bank of America and 816851BM0 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 816851BM0
The main advantage of trading using opposite Bank of America and 816851BM0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 816851BM0 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 816851BM0 will offset losses from the drop in 816851BM0's long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
| 816851BM0 vs. ATT Inc | 816851BM0 vs. Home Depot | 816851BM0 vs. Cisco Systems | 816851BM0 vs. Dupont De Nemours |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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