Correlation Between Bank of America and Total SA
Can any of the company-specific risk be diversified away by investing in both Bank of America and Total SA 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 Total SA 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 Total SA, you can compare the effects of market volatilities on Bank of America and Total SA 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 Total SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Total SA.
Diversification Opportunities for Bank of America and Total SA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Total is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Total SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total 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 Total SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total SA has no effect on the direction of Bank of America i.e., Bank of America and Total SA go up and down completely randomly.
Pair Corralation between Bank of America and Total SA
If you would invest 3,968 in Bank of America on August 29, 2024 and sell it today you would earn a total of 817.50 from holding Bank of America or generate 20.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Bank of America vs. Total SA
Performance |
| Timeline |
| Bank of America |
| Total SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Total SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Total SA
The main advantage of trading using opposite Bank of America and Total SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Total SA 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 Total SA will offset losses from the drop in Total SA'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. JPMorgan Chase Co |
| Total SA vs. Infineon Technologies AG | Total SA vs. NordTelekom Telecommunications Service | Total SA vs. OTP Bank Nyrt | Total SA vs. Commerzbank AG |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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