Correlation Between Bank of America and IShares High
Can any of the company-specific risk be diversified away by investing in both Bank of America and IShares High 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 IShares High 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 iShares High Dividend, you can compare the effects of market volatilities on Bank of America and IShares High 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 IShares High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and IShares High.
Diversification Opportunities for Bank of America and IShares High
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and IShares is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and iShares High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares High Dividend 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 IShares High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares High Dividend has no effect on the direction of Bank of America i.e., Bank of America and IShares High go up and down completely randomly.
Pair Corralation between Bank of America and IShares High
Considering the 90-day investment horizon Bank of America is expected to under-perform the IShares High. In addition to that, Bank of America is 2.0 times more volatile than iShares High Dividend. It trades about -0.16 of its total potential returns per unit of risk. iShares High Dividend is currently generating about 0.25 per unit of volatility. If you would invest 3,251 in iShares High Dividend on December 11, 2024 and sell it today you would earn a total of 297.00 from holding iShares High Dividend or generate 9.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Bank of America vs. iShares High Dividend
Performance |
| Timeline |
| Bank of America |
| iShares High Dividend |
Bank of America and IShares High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and IShares High
The main advantage of trading using opposite Bank of America and IShares High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, IShares High 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 IShares High will offset losses from the drop in IShares High's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC |
| IShares High vs. iShares Core MSCI | IShares High vs. iShares High Dividend | IShares High vs. iShares Core MSCI | IShares High vs. iShares Core SP |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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