Correlation Between EQUINOR and Bank of America
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By analyzing existing cross correlation between EQUINOR ASA and Bank of America, you can compare the effects of market volatilities on EQUINOR 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 EQUINOR with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of EQUINOR and Bank of America.
Diversification Opportunities for EQUINOR and Bank of America
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EQUINOR and Bank is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding EQUINOR ASA 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 EQUINOR 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 EQUINOR ASA 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 EQUINOR i.e., EQUINOR and Bank of America go up and down completely randomly.
Pair Corralation between EQUINOR and Bank of America
Assuming the 90 days trading horizon EQUINOR ASA is expected to under-perform the Bank of America. But the bond apears to be less risky and, when comparing its historical volatility, EQUINOR ASA is 1.87 times less risky than Bank of America. The bond trades about -0.05 of its potential returns per unit of risk. The Bank of America is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,211 in Bank of America on September 2, 2024 and sell it today you would earn a total of 87.00 from holding Bank of America or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
EQUINOR ASA vs. Bank of America
Performance |
| Timeline |
| EQUINOR ASA |
| Bank of America |
EQUINOR and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EQUINOR and Bank of America
The main advantage of trading using opposite EQUINOR and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EQUINOR 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.| EQUINOR vs. Bank of America | EQUINOR vs. Sabre Corpo | EQUINOR vs. Electrovaya Common Shares | EQUINOR vs. SEI Investments |
| Bank of America vs. Bank of America | Bank of America vs. Bank of America | Bank of America vs. China Construction Bank | Bank of America vs. Bank of America |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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