Correlation Between Bank of America and Synektik
Can any of the company-specific risk be diversified away by investing in both Bank of America and Synektik 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 Synektik 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 Synektik SA, you can compare the effects of market volatilities on Bank of America and Synektik 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 Synektik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Synektik.
Diversification Opportunities for Bank of America and Synektik
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and Synektik is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Synektik SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synektik SA 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 Synektik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synektik SA has no effect on the direction of Bank of America i.e., Bank of America and Synektik go up and down completely randomly.
Pair Corralation between Bank of America and Synektik
Considering the 90-day investment horizon Bank of America is expected to under-perform the Synektik. But the stock apears to be less risky and, when comparing its historical volatility, Bank of America is 1.3 times less risky than Synektik. The stock trades about -0.04 of its potential returns per unit of risk. The Synektik SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 21,700 in Synektik SA on December 1, 2024 and sell it today you would earn a total of 650.00 from holding Synektik SA or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Bank of America vs. Synektik SA
Performance |
| Timeline |
| Bank of America |
| Synektik SA |
Bank of America and Synektik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Synektik
The main advantage of trading using opposite Bank of America and Synektik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Synektik 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 Synektik will offset losses from the drop in Synektik'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 |
| Synektik vs. Banco Santander SA | Synektik vs. UniCredit SpA | Synektik vs. CEZ as | Synektik vs. Polski Koncern Naftowy |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |