Correlation Between Bank of America and VULCAN
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By analyzing existing cross correlation between Bank of America and VULCAN MATLS 45, you can compare the effects of market volatilities on Bank of America and VULCAN 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 VULCAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and VULCAN.
Diversification Opportunities for Bank of America and VULCAN
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and VULCAN is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and VULCAN MATLS 45 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VULCAN MATLS 45 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 VULCAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VULCAN MATLS 45 has no effect on the direction of Bank of America i.e., Bank of America and VULCAN go up and down completely randomly.
Pair Corralation between Bank of America and VULCAN
Considering the 90-day investment horizon Bank of America is expected to generate 106.37 times less return on investment than VULCAN. But when comparing it to its historical volatility, Bank of America is 68.78 times less risky than VULCAN. It trades about 0.06 of its potential returns per unit of risk. VULCAN MATLS 45 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8,925 in VULCAN MATLS 45 on September 3, 2024 and sell it today you would lose (994.00) from holding VULCAN MATLS 45 or give up 11.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 52.53% |
| Values | Daily Returns |
Bank of America vs. VULCAN MATLS 45
Performance |
| Timeline |
| Bank of America |
| VULCAN MATLS 45 |
Bank of America and VULCAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and VULCAN
The main advantage of trading using opposite Bank of America and VULCAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, VULCAN 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 VULCAN will offset losses from the drop in VULCAN'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 |
| VULCAN vs. Grupo Televisa SAB | VULCAN vs. Radcom | VULCAN vs. Socket Mobile | VULCAN vs. Simon Property Group |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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