Correlation Between SOUTHERN and Bank of America
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By analyzing existing cross correlation between SOUTHERN CALIF GAS and Bank of America, you can compare the effects of market volatilities on SOUTHERN 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 SOUTHERN with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOUTHERN and Bank of America.
Diversification Opportunities for SOUTHERN and Bank of America
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SOUTHERN and Bank is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHERN CALIF GAS 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 SOUTHERN 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 SOUTHERN CALIF GAS 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 SOUTHERN i.e., SOUTHERN and Bank of America go up and down completely randomly.
Pair Corralation between SOUTHERN and Bank of America
Assuming the 90 days trading horizon SOUTHERN CALIF GAS is expected to generate 85.07 times more return on investment than Bank of America. However, SOUTHERN is 85.07 times more volatile than Bank of America. It trades about 0.12 of its potential returns per unit of risk. Bank of America is currently generating about 0.06 per unit of risk. If you would invest 7,974 in SOUTHERN CALIF GAS on September 12, 2024 and sell it today you would earn a total of 602.00 from holding SOUTHERN CALIF GAS or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 56.97% |
| Values | Daily Returns |
SOUTHERN CALIF GAS vs. Bank of America
Performance |
| Timeline |
| SOUTHERN CALIF GAS |
| Bank of America |
SOUTHERN and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOUTHERN and Bank of America
The main advantage of trading using opposite SOUTHERN and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOUTHERN 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.| SOUTHERN vs. AEP TEX INC | SOUTHERN vs. US BANK NATIONAL | SOUTHERN vs. PayPal Holdings | SOUTHERN vs. Alphabet Inc Class C |
| Bank of America vs. JPMorgan Chase Co | Bank of America vs. Victory Integrity Smallmid Cap | Bank of America vs. Hilton Worldwide Holdings | Bank of America vs. NVIDIA |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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