Correlation Between Comerica and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Comerica and Southern Copper 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 Comerica and Southern Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Southern Copper Corp, you can compare the effects of market volatilities on Comerica and Southern Copper 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 Comerica with a short position of Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Southern Copper.
Diversification Opportunities for Comerica and Southern Copper
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Comerica and Southern is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Southern Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper Corp and Comerica 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 Comerica are associated (or correlated) with Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper Corp has no effect on the direction of Comerica i.e., Comerica and Southern Copper go up and down completely randomly.
Pair Corralation between Comerica and Southern Copper
Assuming the 90 days trading horizon Comerica is expected to generate 1.36 times more return on investment than Southern Copper. However, Comerica is 1.36 times more volatile than Southern Copper Corp. It trades about 0.28 of its potential returns per unit of risk. Southern Copper Corp is currently generating about -0.22 per unit of risk. If you would invest 6,290 in Comerica on September 2, 2024 and sell it today you would earn a total of 918.00 from holding Comerica or generate 14.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Comerica vs. Southern Copper Corp
Performance |
| Timeline |
| Comerica |
| Southern Copper Corp |
Comerica and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and Southern Copper
The main advantage of trading using opposite Comerica and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| Comerica vs. Inspiration Healthcare Group | Comerica vs. Aeorema Communications Plc | Comerica vs. HCA Healthcare | Comerica vs. Spire Healthcare Group |
| Southern Copper vs. New Residential Investment | Southern Copper vs. Future Metals NL | Southern Copper vs. Europa Metals | Southern Copper vs. Fulcrum Metals PLC |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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