Correlation Between Bank of America and Tema Oncology
Can any of the company-specific risk be diversified away by investing in both Bank of America and Tema Oncology 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 Tema Oncology 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 Tema Oncology ETF, you can compare the effects of market volatilities on Bank of America and Tema Oncology 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 Tema Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Tema Oncology.
Diversification Opportunities for Bank of America and Tema Oncology
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Tema is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Tema Oncology ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tema Oncology ETF 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 Tema Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tema Oncology ETF has no effect on the direction of Bank of America i.e., Bank of America and Tema Oncology go up and down completely randomly.
Pair Corralation between Bank of America and Tema Oncology
Considering the 90-day investment horizon Bank of America is expected to generate 0.86 times more return on investment than Tema Oncology. However, Bank of America is 1.16 times less risky than Tema Oncology. It trades about 0.14 of its potential returns per unit of risk. Tema Oncology ETF is currently generating about 0.09 per unit of risk. If you would invest 4,621 in Bank of America on November 9, 2024 and sell it today you would earn a total of 153.00 from holding Bank of America or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Tema Oncology ETF
Performance |
| Timeline |
| Bank of America |
| Tema Oncology ETF |
Bank of America and Tema Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Tema Oncology
The main advantage of trading using opposite Bank of America and Tema Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Tema Oncology 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 Tema Oncology will offset losses from the drop in Tema Oncology'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. Royal Bank of |
| Tema Oncology vs. Freedom Day Dividend | Tema Oncology vs. Franklin Templeton ETF | Tema Oncology vs. iShares MSCI China | Tema Oncology vs. Tidal Trust II |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |