Correlation Between Southern Copper and Comerica
Can any of the company-specific risk be diversified away by investing in both Southern Copper and Comerica 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 Southern Copper and Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Copper Corp and Comerica, you can compare the effects of market volatilities on Southern Copper and Comerica 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 Southern Copper with a short position of Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and Comerica.
Diversification Opportunities for Southern Copper and Comerica
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Southern and Comerica is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper Corp and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and Southern Copper 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 Southern Copper Corp are associated (or correlated) with Comerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comerica has no effect on the direction of Southern Copper i.e., Southern Copper and Comerica go up and down completely randomly.
Pair Corralation between Southern Copper and Comerica
Assuming the 90 days trading horizon Southern Copper Corp is expected to under-perform the Comerica. In addition to that, Southern Copper is 1.2 times more volatile than Comerica. It trades about -0.02 of its total potential returns per unit of risk. Comerica is currently generating about 0.06 per unit of volatility. If you would invest 6,276 in Comerica on November 28, 2024 and sell it today you would earn a total of 126.00 from holding Comerica or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Southern Copper Corp vs. Comerica
Performance |
| Timeline |
| Southern Copper Corp |
| Comerica |
Southern Copper and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Copper and Comerica
The main advantage of trading using opposite Southern Copper and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Copper position performs unexpectedly, Comerica 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 Comerica will offset losses from the drop in Comerica's long position.| Southern Copper vs. Home Depot | Southern Copper vs. Weiss Korea Opportunity | Southern Copper vs. River and Mercantile | Southern Copper vs. Chrysalis Investments |
| Comerica vs. Gaming Realms plc | Comerica vs. Wyndham Hotels Resorts | Comerica vs. Broadcom | Comerica vs. Dalata Hotel Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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