Correlation Between Bank of America and Cartrade Tech
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By analyzing existing cross correlation between Bank of America and Cartrade Tech Limited, you can compare the effects of market volatilities on Bank of America and Cartrade Tech 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 Cartrade Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Cartrade Tech.
Diversification Opportunities for Bank of America and Cartrade Tech
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Cartrade is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Cartrade Tech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartrade Tech Limited 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 Cartrade Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartrade Tech Limited has no effect on the direction of Bank of America i.e., Bank of America and Cartrade Tech go up and down completely randomly.
Pair Corralation between Bank of America and Cartrade Tech
Considering the 90-day investment horizon Bank of America is expected to generate 2.81 times less return on investment than Cartrade Tech. But when comparing it to its historical volatility, Bank of America is 1.54 times less risky than Cartrade Tech. It trades about 0.22 of its potential returns per unit of risk. Cartrade Tech Limited is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 98,670 in Cartrade Tech Limited on August 25, 2024 and sell it today you would earn a total of 29,445 from holding Cartrade Tech Limited or generate 29.84% 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. Cartrade Tech Limited
Performance |
| Timeline |
| Bank of America |
| Cartrade Tech Limited |
Bank of America and Cartrade Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Cartrade Tech
The main advantage of trading using opposite Bank of America and Cartrade Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Cartrade Tech 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 Cartrade Tech will offset losses from the drop in Cartrade Tech's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Canadian Imperial Bank |
| Cartrade Tech vs. Shyam Metalics and | Cartrade Tech vs. Alkali Metals Limited | Cartrade Tech vs. Beta Drugs | Cartrade Tech vs. Industrial Investment Trust |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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