Correlation Between Bank of America and WESTLAKE
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By analyzing existing cross correlation between Bank of America and WESTLAKE CHEM P, you can compare the effects of market volatilities on Bank of America and WESTLAKE 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 WESTLAKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and WESTLAKE.
Diversification Opportunities for Bank of America and WESTLAKE
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and WESTLAKE is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and WESTLAKE CHEM P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTLAKE CHEM P 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 WESTLAKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESTLAKE CHEM P has no effect on the direction of Bank of America i.e., Bank of America and WESTLAKE go up and down completely randomly.
Pair Corralation between Bank of America and WESTLAKE
Considering the 90-day investment horizon Bank of America is expected to generate 0.89 times more return on investment than WESTLAKE. However, Bank of America is 1.13 times less risky than WESTLAKE. It trades about 0.13 of its potential returns per unit of risk. WESTLAKE CHEM P is currently generating about 0.01 per unit of risk. If you would invest 2,949 in Bank of America on August 25, 2024 and sell it today you would earn a total of 1,751 from holding Bank of America or generate 59.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 53.2% |
| Values | Daily Returns |
Bank of America vs. WESTLAKE CHEM P
Performance |
| Timeline |
| Bank of America |
| WESTLAKE CHEM P |
Bank of America and WESTLAKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and WESTLAKE
The main advantage of trading using opposite Bank of America and WESTLAKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, WESTLAKE 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 WESTLAKE will offset losses from the drop in WESTLAKE's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| WESTLAKE vs. Flexible Solutions International | WESTLAKE vs. GMS Inc | WESTLAKE vs. Griffon | WESTLAKE vs. Jacobs Solutions |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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