Correlation Between Bank of America and El Puerto
Can any of the company-specific risk be diversified away by investing in both Bank of America and El Puerto 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 El Puerto 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 El Puerto de, you can compare the effects of market volatilities on Bank of America and El Puerto 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 El Puerto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and El Puerto.
Diversification Opportunities for Bank of America and El Puerto
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and ELPQF is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and El Puerto de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Puerto de 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 El Puerto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Puerto de has no effect on the direction of Bank of America i.e., Bank of America and El Puerto go up and down completely randomly.
Pair Corralation between Bank of America and El Puerto
Considering the 90-day investment horizon Bank of America is expected to generate 0.77 times more return on investment than El Puerto. However, Bank of America is 1.29 times less risky than El Puerto. It trades about 0.27 of its potential returns per unit of risk. El Puerto de is currently generating about -0.21 per unit of risk. If you would invest 4,253 in Bank of America on August 30, 2024 and sell it today you would earn a total of 524.00 from holding Bank of America or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. El Puerto de
Performance |
| Timeline |
| Bank of America |
| El Puerto de |
Bank of America and El Puerto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and El Puerto
The main advantage of trading using opposite Bank of America and El Puerto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, El Puerto 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 El Puerto will offset losses from the drop in El Puerto's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
| El Puerto vs. Nordstrom | El Puerto vs. Macys Inc | El Puerto vs. Dillards Capital Trust | El Puerto vs. Kohls Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |