Correlation Between TAT HONG and Bank of America
Can any of the company-specific risk be diversified away by investing in both TAT HONG and Bank of America 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 TAT HONG and Bank of America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAT HONG EQSRV and Verizon Communications, you can compare the effects of market volatilities on TAT HONG 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 TAT HONG with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAT HONG and Bank of America.
Diversification Opportunities for TAT HONG and Bank of America
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TAT and Bank is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding TAT HONG EQSRV and Verizon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications and TAT HONG 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 TAT HONG EQSRV 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 Verizon Communications has no effect on the direction of TAT HONG i.e., TAT HONG and Bank of America go up and down completely randomly.
Pair Corralation between TAT HONG and Bank of America
Assuming the 90 days horizon TAT HONG is expected to generate 17.41 times less return on investment than Bank of America. In addition to that, TAT HONG is 1.82 times more volatile than Verizon Communications. It trades about 0.01 of its total potential returns per unit of risk. Verizon Communications is currently generating about 0.34 per unit of volatility. If you would invest 3,821 in Verizon Communications on August 30, 2024 and sell it today you would earn a total of 394.00 from holding Verizon Communications or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
TAT HONG EQSRV vs. Verizon Communications
Performance |
| Timeline |
| TAT HONG EQSRV |
| Verizon Communications |
TAT HONG and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAT HONG and Bank of America
The main advantage of trading using opposite TAT HONG and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAT HONG 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.| TAT HONG vs. Verizon Communications | TAT HONG vs. Spirent Communications plc | TAT HONG vs. Charter Communications | TAT HONG vs. Singapore Telecommunications Limited |
| Bank of America vs. Apple Inc | Bank of America vs. Apple Inc | Bank of America vs. Superior Plus Corp | Bank of America vs. SIVERS SEMICONDUCTORS AB |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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 | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |