Correlation Between Bank of America and ATT
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By analyzing existing cross correlation between Verizon Communications and ATT Inc, you can compare the effects of market volatilities on Bank of America and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and ATT.
Diversification Opportunities for Bank of America and ATT
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and ATT is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT 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 Verizon Communications are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Bank of America i.e., Bank of America and ATT go up and down completely randomly.
Pair Corralation between Bank of America and ATT
Assuming the 90 days horizon Bank of America is expected to generate 4.03 times less return on investment than ATT. In addition to that, Bank of America is 1.03 times more volatile than ATT Inc. It trades about 0.04 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.16 per unit of volatility. If you would invest 1,477 in ATT Inc on November 8, 2024 and sell it today you would earn a total of 873.00 from holding ATT Inc or generate 59.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Verizon Communications vs. ATT Inc
Performance |
| Timeline |
| Verizon Communications |
| ATT Inc |
Bank of America and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and ATT
The main advantage of trading using opposite Bank of America and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| Bank of America vs. VARIOUS EATERIES LS | Bank of America vs. DATATEC LTD 2 | Bank of America vs. DATADOT TECHNOLOGY | Bank of America vs. TERADATA |
| ATT vs. Air Transport Services | ATT vs. BII Railway Transportation | ATT vs. Tianjin Capital Environmental | ATT vs. MAANSHAN IRON H |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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