Correlation Between Bank of America and PETROLEOS
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By analyzing existing cross correlation between Bank of America and PETROLEOS MEXICANOS 65, you can compare the effects of market volatilities on Bank of America and PETROLEOS 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 PETROLEOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and PETROLEOS.
Diversification Opportunities for Bank of America and PETROLEOS
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and PETROLEOS is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and PETROLEOS MEXICANOS 65 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PETROLEOS MEXICANOS 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 PETROLEOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PETROLEOS MEXICANOS has no effect on the direction of Bank of America i.e., Bank of America and PETROLEOS go up and down completely randomly.
Pair Corralation between Bank of America and PETROLEOS
Considering the 90-day investment horizon Bank of America is expected to generate 0.88 times more return on investment than PETROLEOS. However, Bank of America is 1.14 times less risky than PETROLEOS. It trades about 0.1 of its potential returns per unit of risk. PETROLEOS MEXICANOS 65 is currently generating about 0.02 per unit of risk. If you would invest 2,820 in Bank of America on August 31, 2024 and sell it today you would earn a total of 1,931 from holding Bank of America or generate 68.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.33% |
| Values | Daily Returns |
Bank of America vs. PETROLEOS MEXICANOS 65
Performance |
| Timeline |
| Bank of America |
| PETROLEOS MEXICANOS |
Bank of America and PETROLEOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and PETROLEOS
The main advantage of trading using opposite Bank of America and PETROLEOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, PETROLEOS 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 PETROLEOS will offset losses from the drop in PETROLEOS's long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
| PETROLEOS vs. Amkor Technology | PETROLEOS vs. Usio Inc | PETROLEOS vs. Agnico Eagle Mines | PETROLEOS vs. Jeld Wen Holding |
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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