Correlation Between Bank of America and Expand Energy
Can any of the company-specific risk be diversified away by investing in both Bank of America and Expand Energy 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 Bank of America and Expand Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Expand Energy, you can compare the effects of market volatilities on Bank of America and Expand Energy 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 Expand Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Expand Energy.
Diversification Opportunities for Bank of America and Expand Energy
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Expand is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Expand Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expand Energy 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 Expand Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expand Energy has no effect on the direction of Bank of America i.e., Bank of America and Expand Energy go up and down completely randomly.
Pair Corralation between Bank of America and Expand Energy
Considering the 90-day investment horizon Bank of America is expected to generate 32.59 times more return on investment than Expand Energy. However, Bank of America is 32.59 times more volatile than Expand Energy. It trades about 0.17 of its potential returns per unit of risk. Expand Energy is currently generating about -0.13 per unit of risk. If you would invest 4,698 in Bank of America on August 13, 2025 and sell it today you would earn a total of 644.00 from holding Bank of America or generate 13.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Expand Energy
Performance |
| Timeline |
| Bank of America |
| Expand Energy |
Bank of America and Expand Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Expand Energy
The main advantage of trading using opposite Bank of America and Expand Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Expand Energy 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 Expand Energy will offset losses from the drop in Expand Energy's long position.| Bank of America vs. Wells Fargo | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Royal Bank of | Bank of America vs. Citigroup |
| Expand Energy vs. Expand Energy | Expand Energy vs. Expand Energy | Expand Energy vs. Cheniere Energy Partners | Expand Energy vs. Woodside Energy Group |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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