Correlation Between Bank of America and WASTE
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By analyzing existing cross correlation between Bank of America and WASTE MGMT INC, you can compare the effects of market volatilities on Bank of America and WASTE 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 WASTE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and WASTE.
Diversification Opportunities for Bank of America and WASTE
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and WASTE is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and WASTE MGMT INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WASTE MGMT INC 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 WASTE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WASTE MGMT INC has no effect on the direction of Bank of America i.e., Bank of America and WASTE go up and down completely randomly.
Pair Corralation between Bank of America and WASTE
Considering the 90-day investment horizon Bank of America is expected to generate 4.02 times more return on investment than WASTE. However, Bank of America is 4.02 times more volatile than WASTE MGMT INC. It trades about 0.05 of its potential returns per unit of risk. WASTE MGMT INC is currently generating about 0.01 per unit of risk. If you would invest 3,278 in Bank of America on August 24, 2024 and sell it today you would earn a total of 1,422 from holding Bank of America or generate 43.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.79% |
| Values | Daily Returns |
Bank of America vs. WASTE MGMT INC
Performance |
| Timeline |
| Bank of America |
| WASTE MGMT INC |
Bank of America and WASTE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and WASTE
The main advantage of trading using opposite Bank of America and WASTE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, WASTE 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 WASTE will offset losses from the drop in WASTE's long position.| Bank of America vs. Amtech Systems | Bank of America vs. Gold Fields Ltd | Bank of America vs. Aegean Airlines SA | Bank of America vs. Merck Company |
| WASTE vs. Universal Music Group | WASTE vs. Awilco Drilling PLC | WASTE vs. Pentair PLC | WASTE vs. Warner Music 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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