Correlation Between American Express and B of A

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both American Express and B of A at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining American Express and B of A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Bank Of America, you can compare the effects of market volatilities on American Express and B of A 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 American Express with a short position of B of A. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and B of A.

Diversification Opportunities for American Express and B of A

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between American and B of A is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding American Express 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 American Express 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 American Express are associated (or correlated) with B of A. 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 American Express i.e., American Express and B of A go up and down completely randomly.

Pair Corralation between American Express and B of A

Considering the 90-day investment horizon American Express is expected to generate 0.87 times more return on investment than B of A. However, American Express is 1.15 times less risky than B of A. It trades about 0.52 of its potential returns per unit of risk. Bank Of America is currently generating about 0.39 per unit of risk. If you would invest  14,233  in American Express on May 19, 2022 and sell it today you would earn a total of  2,302  from holding American Express or generate 16.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

American Express  vs.  Bank Of America

 Performance (%) 
       Timeline  
American Express 
American Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very sluggish basic indicators, American Express may actually be approaching a critical reversion point that can send shares even higher in September 2022.

American Price Channel

Bank Of America 
B of A Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bank Of America are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, B of A may actually be approaching a critical reversion point that can send shares even higher in September 2022.

B of A Price Channel

American Express and B of A Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with American Express and B of A

The main advantage of trading using opposite American Express and B of A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, B of A 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 B of A will offset losses from the drop in B of A's long position.
The idea behind American Express 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.
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

Other Complementary Tools

Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go