Correlation Between Bank of America and Teixeira Duarte
Can any of the company-specific risk be diversified away by investing in both Bank of America and Teixeira Duarte 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 Teixeira Duarte 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 Teixeira Duarte, you can compare the effects of market volatilities on Bank of America and Teixeira Duarte 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 Teixeira Duarte. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Teixeira Duarte.
Diversification Opportunities for Bank of America and Teixeira Duarte
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Teixeira is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Teixeira Duarte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teixeira Duarte 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 Teixeira Duarte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teixeira Duarte has no effect on the direction of Bank of America i.e., Bank of America and Teixeira Duarte go up and down completely randomly.
Pair Corralation between Bank of America and Teixeira Duarte
Considering the 90-day investment horizon Bank of America is expected to generate 1.03 times less return on investment than Teixeira Duarte. But when comparing it to its historical volatility, Bank of America is 1.97 times less risky than Teixeira Duarte. It trades about 0.05 of its potential returns per unit of risk. Teixeira Duarte is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8.88 in Teixeira Duarte on November 27, 2024 and sell it today you would earn a total of 2.12 from holding Teixeira Duarte or generate 23.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.21% |
| Values | Daily Returns |
Bank of America vs. Teixeira Duarte
Performance |
| Timeline |
| Bank of America |
| Teixeira Duarte |
Bank of America and Teixeira Duarte Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Teixeira Duarte
The main advantage of trading using opposite Bank of America and Teixeira Duarte positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Teixeira Duarte 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 Teixeira Duarte will offset losses from the drop in Teixeira Duarte'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 |
| Teixeira Duarte vs. Mota Engil SGPS SA | Teixeira Duarte vs. Martifer SGPS SA | Teixeira Duarte vs. Impresa Sociedade | Teixeira Duarte vs. Sonae SGPS 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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