Correlation Between Bank of America and Pegasus Tel
Can any of the company-specific risk be diversified away by investing in both Bank of America and Pegasus Tel 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 Pegasus Tel 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 Pegasus Tel, you can compare the effects of market volatilities on Bank of America and Pegasus Tel 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 Pegasus Tel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Pegasus Tel.
Diversification Opportunities for Bank of America and Pegasus Tel
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Pegasus is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Pegasus Tel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasus Tel 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 Pegasus Tel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasus Tel has no effect on the direction of Bank of America i.e., Bank of America and Pegasus Tel go up and down completely randomly.
Pair Corralation between Bank of America and Pegasus Tel
Considering the 90-day investment horizon Bank of America is expected to generate 0.2 times more return on investment than Pegasus Tel. However, Bank of America is 4.94 times less risky than Pegasus Tel. It trades about 0.27 of its potential returns per unit of risk. Pegasus Tel is currently generating about 0.05 per unit of risk. If you would invest 4,262 in Bank of America on August 28, 2024 and sell it today you would earn a total of 513.00 from holding Bank of America or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. Pegasus Tel
Performance |
| Timeline |
| Bank of America |
| Pegasus Tel |
Bank of America and Pegasus Tel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Pegasus Tel
The main advantage of trading using opposite Bank of America and Pegasus Tel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Pegasus Tel 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 Pegasus Tel will offset losses from the drop in Pegasus Tel's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Pegasus Tel vs. KDDI Corp | Pegasus Tel vs. Amrica Mvil, SAB | Pegasus Tel vs. ATT Inc | Pegasus Tel vs. FingerMotion |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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