Correlation Between AMGEN and Bank of America
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By analyzing existing cross correlation between AMGEN INC and Bank of America, you can compare the effects of market volatilities on AMGEN and Bank of America 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 AMGEN with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMGEN and Bank of America.
Diversification Opportunities for AMGEN and Bank of America
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AMGEN and Bank is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding AMGEN INC and Bank of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of America and AMGEN 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 AMGEN INC are associated (or correlated) with Bank of America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of America has no effect on the direction of AMGEN i.e., AMGEN and Bank of America go up and down completely randomly.
Pair Corralation between AMGEN and Bank of America
Assuming the 90 days trading horizon AMGEN INC is expected to under-perform the Bank of America. But the bond apears to be less risky and, when comparing its historical volatility, AMGEN INC is 1.77 times less risky than Bank of America. The bond trades about -0.22 of its potential returns per unit of risk. The Bank of America is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 4,182 in Bank of America on September 1, 2024 and sell it today you would earn a total of 569.00 from holding Bank of America or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
AMGEN INC vs. Bank of America
Performance |
| Timeline |
| AMGEN INC |
| Bank of America |
AMGEN and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMGEN and Bank of America
The main advantage of trading using opposite AMGEN and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMGEN position performs unexpectedly, Bank of America 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 Bank of America will offset losses from the drop in Bank of America's long position.The idea behind AMGEN INC and Bank of America pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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