Correlation Between Bank of America and WELLPOINT
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By analyzing existing cross correlation between Bank of America and WELLPOINT INC 465, you can compare the effects of market volatilities on Bank of America and WELLPOINT 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 WELLPOINT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and WELLPOINT.
Diversification Opportunities for Bank of America and WELLPOINT
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and WELLPOINT is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and WELLPOINT INC 465 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WELLPOINT INC 465 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 WELLPOINT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WELLPOINT INC 465 has no effect on the direction of Bank of America i.e., Bank of America and WELLPOINT go up and down completely randomly.
Pair Corralation between Bank of America and WELLPOINT
Considering the 90-day investment horizon Bank of America is expected to generate 1.26 times more return on investment than WELLPOINT. However, Bank of America is 1.26 times more volatile than WELLPOINT INC 465. It trades about 0.31 of its potential returns per unit of risk. WELLPOINT INC 465 is currently generating about 0.0 per unit of risk. If you would invest 4,182 in Bank of America on September 1, 2024 and sell it today you would earn a total of 569.00 from holding Bank of America or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. WELLPOINT INC 465
Performance |
| Timeline |
| Bank of America |
| WELLPOINT INC 465 |
Bank of America and WELLPOINT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and WELLPOINT
The main advantage of trading using opposite Bank of America and WELLPOINT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, WELLPOINT 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 WELLPOINT will offset losses from the drop in WELLPOINT's long position.| Bank of America vs. Citigroup | Bank of America vs. Toronto Dominion Bank | 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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