Correlation Between Bank of America and GRUPO ECOENER
Can any of the company-specific risk be diversified away by investing in both Bank of America and GRUPO ECOENER 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 GRUPO ECOENER 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 GRUPO ECOENER EO, you can compare the effects of market volatilities on Bank of America and GRUPO ECOENER 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 GRUPO ECOENER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and GRUPO ECOENER.
Diversification Opportunities for Bank of America and GRUPO ECOENER
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and GRUPO is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and GRUPO ECOENER EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO ECOENER EO 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 GRUPO ECOENER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO ECOENER EO has no effect on the direction of Bank of America i.e., Bank of America and GRUPO ECOENER go up and down completely randomly.
Pair Corralation between Bank of America and GRUPO ECOENER
Considering the 90-day investment horizon Bank of America is expected to generate 2.02 times less return on investment than GRUPO ECOENER. But when comparing it to its historical volatility, Bank of America is 1.08 times less risky than GRUPO ECOENER. It trades about 0.26 of its potential returns per unit of risk. GRUPO ECOENER EO is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 432.00 in GRUPO ECOENER EO on October 29, 2024 and sell it today you would earn a total of 57.00 from holding GRUPO ECOENER EO or generate 13.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Bank of America vs. GRUPO ECOENER EO
Performance |
| Timeline |
| Bank of America |
| GRUPO ECOENER EO |
Bank of America and GRUPO ECOENER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and GRUPO ECOENER
The main advantage of trading using opposite Bank of America and GRUPO ECOENER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, GRUPO ECOENER 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 GRUPO ECOENER will offset losses from the drop in GRUPO ECOENER's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC |
| GRUPO ECOENER vs. MICRONIC MYDATA | GRUPO ECOENER vs. Compagnie Plastic Omnium | GRUPO ECOENER vs. SANOK RUBBER ZY | GRUPO ECOENER vs. Sumitomo Rubber Industries |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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