Correlation Between Bank of America and Positivo Tecnologia
Can any of the company-specific risk be diversified away by investing in both Bank of America and Positivo Tecnologia 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 Positivo Tecnologia 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 Positivo Tecnologia SA, you can compare the effects of market volatilities on Bank of America and Positivo Tecnologia 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 Positivo Tecnologia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Positivo Tecnologia.
Diversification Opportunities for Bank of America and Positivo Tecnologia
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Positivo is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Positivo Tecnologia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Positivo Tecnologia 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 Positivo Tecnologia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Positivo Tecnologia has no effect on the direction of Bank of America i.e., Bank of America and Positivo Tecnologia go up and down completely randomly.
Pair Corralation between Bank of America and Positivo Tecnologia
Considering the 90-day investment horizon Bank of America is expected to generate 0.47 times more return on investment than Positivo Tecnologia. However, Bank of America is 2.14 times less risky than Positivo Tecnologia. It trades about 0.29 of its potential returns per unit of risk. Positivo Tecnologia SA is currently generating about -0.28 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 Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Bank of America vs. Positivo Tecnologia SA
Performance |
| Timeline |
| Bank of America |
| Positivo Tecnologia |
Bank of America and Positivo Tecnologia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Positivo Tecnologia
The main advantage of trading using opposite Bank of America and Positivo Tecnologia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Positivo Tecnologia 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 Positivo Tecnologia will offset losses from the drop in Positivo Tecnologia's 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 |
| Positivo Tecnologia vs. Marcopolo SA | Positivo Tecnologia vs. Gafisa SA | Positivo Tecnologia vs. Randon SA Implementos | Positivo Tecnologia vs. TOTVS 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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