Correlation Between Bank of America and Nexa Resources
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By analyzing existing cross correlation between Bank of America and Nexa Resources Peru, you can compare the effects of market volatilities on Bank of America and Nexa Resources 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 Nexa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Nexa Resources.
Diversification Opportunities for Bank of America and Nexa Resources
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Nexa is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Nexa Resources Peru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexa Resources Peru 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 Nexa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexa Resources Peru has no effect on the direction of Bank of America i.e., Bank of America and Nexa Resources go up and down completely randomly.
Pair Corralation between Bank of America and Nexa Resources
Assuming the 90 days trading horizon Bank of America is expected to generate 1.11 times more return on investment than Nexa Resources. However, Bank of America is 1.11 times more volatile than Nexa Resources Peru. It trades about 0.14 of its potential returns per unit of risk. Nexa Resources Peru is currently generating about 0.01 per unit of risk. If you would invest 3,270 in Bank of America on November 3, 2024 and sell it today you would earn a total of 1,390 from holding Bank of America or generate 42.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 71.43% |
| Values | Daily Returns |
Bank of America vs. Nexa Resources Peru
Performance |
| Timeline |
| Bank of America |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Nexa Resources Peru |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Nexa Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Nexa Resources
The main advantage of trading using opposite Bank of America and Nexa Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Nexa Resources 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 Nexa Resources will offset losses from the drop in Nexa Resources' long position.| Bank of America vs. Southern Copper Corp | Bank of America vs. Banco de Credito | Bank of America vs. InRetail Peru Corp |
| Nexa Resources vs. InRetail Peru Corp | Nexa Resources vs. Banco de Credito | Nexa Resources vs. Southern Copper Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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