Correlation Between Bank of America and America Movil
Can any of the company-specific risk be diversified away by investing in both Bank of America and America Movil 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 America Movil 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 Aerometrex, you can compare the effects of market volatilities on Bank of America and America Movil 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 America Movil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and America Movil.
Diversification Opportunities for Bank of America and America Movil
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and America is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Aerometrex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on America Movil 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 America Movil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of America Movil has no effect on the direction of Bank of America i.e., Bank of America and America Movil go up and down completely randomly.
Pair Corralation between Bank of America and America Movil
Considering the 90-day investment horizon Bank of America is expected to generate 0.4 times more return on investment than America Movil. However, Bank of America is 2.47 times less risky than America Movil. It trades about 0.26 of its potential returns per unit of risk. Aerometrex is currently generating about -0.09 per unit of risk. If you would invest 4,262 in Bank of America on August 29, 2024 and sell it today you would earn a total of 515.00 from holding Bank of America or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Aerometrex
Performance |
| Timeline |
| Bank of America |
| America Movil |
Bank of America and America Movil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and America Movil
The main advantage of trading using opposite Bank of America and America Movil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, America Movil 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 America Movil will offset losses from the drop in America Movil's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. JPMorgan Chase Co |
| America Movil vs. National Storage REIT | America Movil vs. Australian Unity Office | America Movil vs. Australian United Investment | America Movil vs. Clime Investment Management |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |