Correlation Between Bank of America and WISCONSIN
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By analyzing existing cross correlation between Bank of America and WISCONSIN ELEC PWR, you can compare the effects of market volatilities on Bank of America and WISCONSIN 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 WISCONSIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and WISCONSIN.
Diversification Opportunities for Bank of America and WISCONSIN
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and WISCONSIN is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and WISCONSIN ELEC PWR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WISCONSIN ELEC PWR 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 WISCONSIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WISCONSIN ELEC PWR has no effect on the direction of Bank of America i.e., Bank of America and WISCONSIN go up and down completely randomly.
Pair Corralation between Bank of America and WISCONSIN
Considering the 90-day investment horizon Bank of America is expected to generate 1.61 times less return on investment than WISCONSIN. But when comparing it to its historical volatility, Bank of America is 3.51 times less risky than WISCONSIN. It trades about 0.06 of its potential returns per unit of risk. WISCONSIN ELEC PWR is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11,513 in WISCONSIN ELEC PWR on September 12, 2024 and sell it today you would earn a total of 0.00 from holding WISCONSIN ELEC PWR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 11.31% |
| Values | Daily Returns |
Bank of America vs. WISCONSIN ELEC PWR
Performance |
| Timeline |
| Bank of America |
| WISCONSIN ELEC PWR |
Bank of America and WISCONSIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and WISCONSIN
The main advantage of trading using opposite Bank of America and WISCONSIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, WISCONSIN 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 WISCONSIN will offset losses from the drop in WISCONSIN's long position.| Bank of America vs. JPMorgan Chase Co | Bank of America vs. Victory Integrity Smallmid Cap | Bank of America vs. Hilton Worldwide Holdings | Bank of America vs. NVIDIA |
| WISCONSIN vs. SEI Investments | WISCONSIN vs. Mind Medicine | WISCONSIN vs. Western Asset Investment | WISCONSIN vs. Ardelyx |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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