Correlation Between Comtech Telecommunicatio and Bank of AmericaPFD SER B
Can any of the company-specific risk be diversified away by investing in both Comtech Telecommunicatio and Bank of AmericaPFD SER B 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 Comtech Telecommunicatio and Bank of AmericaPFD SER B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comtech Telecommunications Corp and Bank of America, you can compare the effects of market volatilities on Comtech Telecommunicatio and Bank of AmericaPFD SER B 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 Comtech Telecommunicatio with a short position of Bank of AmericaPFD SER B . Check out your portfolio center. Please also check ongoing floating volatility patterns of Comtech Telecommunicatio and Bank of AmericaPFD SER B .
Diversification Opportunities for Comtech Telecommunicatio and Bank of AmericaPFD SER B
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Comtech and Bank is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor and Bank of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of AmericaPFD SER B and Comtech Telecommunicatio 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 Comtech Telecommunications Corp are associated (or correlated) with Bank of AmericaPFD SER B . Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of AmericaPFD SER B has no effect on the direction of Comtech Telecommunicatio i.e., Comtech Telecommunicatio and Bank of AmericaPFD SER B go up and down completely randomly.
Pair Corralation between Comtech Telecommunicatio and Bank of AmericaPFD SER B
Given the investment horizon of 90 days Comtech Telecommunications Corp is expected to under-perform the Bank of AmericaPFD SER B . But the stock apears to be less risky and, when comparing its historical volatility, Comtech Telecommunications Corp is 1.63 times less risky than Bank of AmericaPFD SER B . The stock trades about -0.01 of its potential returns per unit of risk. The Bank of America is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 18,832 in Bank of America on August 29, 2024 and sell it today you would earn a total of 168.00 from holding Bank of America or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Comtech Telecommunications Cor vs. Bank of America
Performance |
| Timeline |
| Comtech Telecommunicatio |
| Bank of AmericaPFD SER B |
Comtech Telecommunicatio and Bank of AmericaPFD SER B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comtech Telecommunicatio and Bank of AmericaPFD SER B
The main advantage of trading using opposite Comtech Telecommunicatio and Bank of AmericaPFD SER B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comtech Telecommunicatio position performs unexpectedly, Bank of AmericaPFD SER B 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 Bank of AmericaPFD SER B will offset losses from the drop in Bank of AmericaPFD SER B 's long position.| Comtech Telecommunicatio vs. KVH Industries | Comtech Telecommunicatio vs. Merck Company | Comtech Telecommunicatio vs. Pharvaris BV | Comtech Telecommunicatio vs. Brinker International |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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