Correlation Between Bank of America and OMNICOM
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By analyzing existing cross correlation between Bank of America and OMNICOM GROUP INC, you can compare the effects of market volatilities on Bank of America and OMNICOM 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 OMNICOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and OMNICOM.
Diversification Opportunities for Bank of America and OMNICOM
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and OMNICOM is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and OMNICOM GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMNICOM GROUP INC 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 OMNICOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMNICOM GROUP INC has no effect on the direction of Bank of America i.e., Bank of America and OMNICOM go up and down completely randomly.
Pair Corralation between Bank of America and OMNICOM
Considering the 90-day investment horizon Bank of America is expected to under-perform the OMNICOM. In addition to that, Bank of America is 2.51 times more volatile than OMNICOM GROUP INC. It trades about -0.09 of its total potential returns per unit of risk. OMNICOM GROUP INC is currently generating about -0.1 per unit of volatility. If you would invest 9,867 in OMNICOM GROUP INC on December 5, 2024 and sell it today you would lose (348.00) from holding OMNICOM GROUP INC or give up 3.53% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.33% |
Values | Daily Returns |
Bank of America vs. OMNICOM GROUP INC
Performance |
Timeline |
Bank of America |
OMNICOM GROUP INC |
Bank of America and OMNICOM Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of America and OMNICOM
The main advantage of trading using opposite Bank of America and OMNICOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, OMNICOM 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 OMNICOM will offset losses from the drop in OMNICOM's long position.Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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