Correlation Between Bank of America and Alpha Teknova
Can any of the company-specific risk be diversified away by investing in both Bank of America and Alpha Teknova 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 Alpha Teknova 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 Alpha Teknova, you can compare the effects of market volatilities on Bank of America and Alpha Teknova 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 Alpha Teknova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Alpha Teknova.
Diversification Opportunities for Bank of America and Alpha Teknova
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Alpha is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Alpha Teknova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Teknova 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 Alpha Teknova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Teknova has no effect on the direction of Bank of America i.e., Bank of America and Alpha Teknova go up and down completely randomly.
Pair Corralation between Bank of America and Alpha Teknova
Considering the 90-day investment horizon Bank of America is expected to generate 1.11 times less return on investment than Alpha Teknova. But when comparing it to its historical volatility, Bank of America is 3.81 times less risky than Alpha Teknova. It trades about 0.26 of its potential returns per unit of risk. Alpha Teknova is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 673.00 in Alpha Teknova on August 28, 2024 and sell it today you would earn a total of 46.00 from holding Alpha Teknova or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Alpha Teknova
Performance |
| Timeline |
| Bank of America |
| Alpha Teknova |
Bank of America and Alpha Teknova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Alpha Teknova
The main advantage of trading using opposite Bank of America and Alpha Teknova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Alpha Teknova 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 Alpha Teknova will offset losses from the drop in Alpha Teknova's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Alpha Teknova vs. Collegium Pharmaceutical | Alpha Teknova vs. Phibro Animal Health | Alpha Teknova vs. ANI Pharmaceuticals | Alpha Teknova vs. Procaps Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |