Correlation Between Bank of America and Volcan
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By analyzing existing cross correlation between Bank of America and Volcan Compania Minera, you can compare the effects of market volatilities on Bank of America and Volcan 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 Volcan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Volcan.
Diversification Opportunities for Bank of America and Volcan
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Volcan is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Volcan Compania Minera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volcan Compania Minera 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 Volcan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volcan Compania Minera has no effect on the direction of Bank of America i.e., Bank of America and Volcan go up and down completely randomly.
Pair Corralation between Bank of America and Volcan
Considering the 90-day investment horizon Bank of America is expected to generate 0.44 times more return on investment than Volcan. However, Bank of America is 2.3 times less risky than Volcan. It trades about 0.13 of its potential returns per unit of risk. Volcan Compania Minera is currently generating about 0.05 per unit of risk. If you would invest 2,990 in Bank of America on August 26, 2024 and sell it today you would earn a total of 1,710 from holding Bank of America or generate 57.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.12% |
| Values | Daily Returns |
Bank of America vs. Volcan Compania Minera
Performance |
| Timeline |
| Bank of America |
| Volcan Compania Minera |
Bank of America and Volcan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Volcan
The main advantage of trading using opposite Bank of America and Volcan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Volcan 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 Volcan will offset losses from the drop in Volcan'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 |
| Volcan vs. FTAI Aviation Ltd | Volcan vs. Constellation Brands Class | Volcan vs. China Aircraft Leasing | Volcan vs. Lendlease Global Commercial |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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