Correlation Between Bank of America and Atom Empreendimentos
Can any of the company-specific risk be diversified away by investing in both Bank of America and Atom Empreendimentos 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 Atom Empreendimentos 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 Atom Empreendimentos e, you can compare the effects of market volatilities on Bank of America and Atom Empreendimentos 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 Atom Empreendimentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Atom Empreendimentos.
Diversification Opportunities for Bank of America and Atom Empreendimentos
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Atom is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Atom Empreendimentos e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atom Empreendimentos 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 Atom Empreendimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atom Empreendimentos has no effect on the direction of Bank of America i.e., Bank of America and Atom Empreendimentos go up and down completely randomly.
Pair Corralation between Bank of America and Atom Empreendimentos
Considering the 90-day investment horizon Bank of America is expected to generate 0.24 times more return on investment than Atom Empreendimentos. However, Bank of America is 4.25 times less risky than Atom Empreendimentos. It trades about 0.29 of its potential returns per unit of risk. Atom Empreendimentos e is currently generating about 0.04 per unit of risk. If you would invest 4,231 in Bank of America on August 31, 2024 and sell it today you would earn a total of 546.00 from holding Bank of America or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. Atom Empreendimentos e
Performance |
| Timeline |
| Bank of America |
| Atom Empreendimentos |
Bank of America and Atom Empreendimentos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Atom Empreendimentos
The main advantage of trading using opposite Bank of America and Atom Empreendimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Atom Empreendimentos 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 Atom Empreendimentos will offset losses from the drop in Atom Empreendimentos' long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
| Atom Empreendimentos vs. Lupatech SA | Atom Empreendimentos vs. Triunfo Participaes e | Atom Empreendimentos vs. Viver Incorporadora e | Atom Empreendimentos vs. Bombril SA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |