Correlation Between Bank of America and NESNVX
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By analyzing existing cross correlation between Bank of America and NESNVX 425 01 OCT 29, you can compare the effects of market volatilities on Bank of America and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and NESNVX.
Diversification Opportunities for Bank of America and NESNVX
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and NESNVX is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and NESNVX 425 01 OCT 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 425 01 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 425 01 has no effect on the direction of Bank of America i.e., Bank of America and NESNVX go up and down completely randomly.
Pair Corralation between Bank of America and NESNVX
Considering the 90-day investment horizon Bank of America is expected to under-perform the NESNVX. In addition to that, Bank of America is 1.62 times more volatile than NESNVX 425 01 OCT 29. It trades about -0.26 of its total potential returns per unit of risk. NESNVX 425 01 OCT 29 is currently generating about 0.12 per unit of volatility. If you would invest 9,888 in NESNVX 425 01 OCT 29 on September 26, 2024 and sell it today you would earn a total of 72.00 from holding NESNVX 425 01 OCT 29 or generate 0.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 42.86% |
Values | Daily Returns |
Bank of America vs. NESNVX 425 01 OCT 29
Performance |
Timeline |
Bank of America |
NESNVX 425 01 |
Bank of America and NESNVX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of America and NESNVX
The main advantage of trading using opposite Bank of America and NESNVX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, NESNVX 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 NESNVX will offset losses from the drop in NESNVX's long position.The idea behind Bank of America and NESNVX 425 01 OCT 29 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.NESNVX vs. SkyWest | NESNVX vs. Air Transport Services | NESNVX vs. Spyre Therapeutics | NESNVX vs. Sellas Life Sciences |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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