Correlation Between Bank of America and WisdomTree Inflation
Can any of the company-specific risk be diversified away by investing in both Bank of America and WisdomTree Inflation at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank of America and WisdomTree Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and WisdomTree Inflation Plus, you can compare the effects of market volatilities on Bank of America and WisdomTree Inflation 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 WisdomTree Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and WisdomTree Inflation.
Diversification Opportunities for Bank of America and WisdomTree Inflation
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and WisdomTree is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and WisdomTree Inflation Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Inflation Plus 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 WisdomTree Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Inflation Plus has no effect on the direction of Bank of America i.e., Bank of America and WisdomTree Inflation go up and down completely randomly.
Pair Corralation between Bank of America and WisdomTree Inflation
Considering the 90-day investment horizon Bank of America is expected to generate 1.31 times less return on investment than WisdomTree Inflation. In addition to that, Bank of America is 1.57 times more volatile than WisdomTree Inflation Plus. It trades about 0.12 of its total potential returns per unit of risk. WisdomTree Inflation Plus is currently generating about 0.24 per unit of volatility. If you would invest 3,158 in WisdomTree Inflation Plus on October 5, 2025 and sell it today you would earn a total of 217.00 from holding WisdomTree Inflation Plus or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. WisdomTree Inflation Plus
Performance |
| Timeline |
| Bank of America |
| WisdomTree Inflation Plus |
Bank of America and WisdomTree Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and WisdomTree Inflation
The main advantage of trading using opposite Bank of America and WisdomTree Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, WisdomTree Inflation 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 WisdomTree Inflation will offset losses from the drop in WisdomTree Inflation's long position.| Bank of America vs. Wells Fargo | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Royal Bank of | Bank of America vs. Citigroup |
| WisdomTree Inflation vs. WisdomTree MidCap Quality | WisdomTree Inflation vs. Litman Gregory Funds | WisdomTree Inflation vs. Tidal Trust II | WisdomTree Inflation vs. Tidal Trust II |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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