Correlation Between Bank of America and Tortoise North
Can any of the company-specific risk be diversified away by investing in both Bank of America and Tortoise North 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 Tortoise North 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 Tortoise North American, you can compare the effects of market volatilities on Bank of America and Tortoise North 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 Tortoise North. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Tortoise North.
Diversification Opportunities for Bank of America and Tortoise North
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Tortoise is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Tortoise North American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tortoise North American 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 Tortoise North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tortoise North American has no effect on the direction of Bank of America i.e., Bank of America and Tortoise North go up and down completely randomly.
Pair Corralation between Bank of America and Tortoise North
Considering the 90-day investment horizon Bank of America is expected to generate 2.0 times more return on investment than Tortoise North. However, Bank of America is 2.0 times more volatile than Tortoise North American. It trades about 0.26 of its potential returns per unit of risk. Tortoise North American is currently generating about 0.48 per unit of risk. If you would invest 4,262 in Bank of America on August 27, 2024 and sell it today you would earn a total of 488.00 from holding Bank of America or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Tortoise North American
Performance |
| Timeline |
| Bank of America |
| Tortoise North American |
Bank of America and Tortoise North Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Tortoise North
The main advantage of trading using opposite Bank of America and Tortoise North positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Tortoise North 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 Tortoise North will offset losses from the drop in Tortoise North's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal | Bank of America vs. Bank of Nova |
| Tortoise North vs. UBS AG London | Tortoise North vs. ETRACS 2xMonthly Pay | Tortoise North vs. UBS AG London |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |