Correlation Between Bank of Hawaii and Comerica
Can any of the company-specific risk be diversified away by investing in both Bank of Hawaii 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 Bank of Hawaii and Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Hawaii and Comerica, you can compare the effects of market volatilities on Bank of Hawaii 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 Bank of Hawaii with a short position of Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Hawaii and Comerica.
Diversification Opportunities for Bank of Hawaii and Comerica
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Comerica is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Hawaii and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and Bank of Hawaii 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 Hawaii 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 Bank of Hawaii i.e., Bank of Hawaii and Comerica go up and down completely randomly.
Pair Corralation between Bank of Hawaii and Comerica
Assuming the 90 days trading horizon Bank of Hawaii is expected to generate 5.59 times less return on investment than Comerica. But when comparing it to its historical volatility, Bank of Hawaii is 1.93 times less risky than Comerica. It trades about 0.04 of its potential returns per unit of risk. Comerica is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,784 in Comerica on August 29, 2024 and sell it today you would earn a total of 2,448 from holding Comerica or generate 51.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Hawaii vs. Comerica
Performance |
| Timeline |
| Bank of Hawaii |
| Comerica |
Bank of Hawaii and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Hawaii and Comerica
The main advantage of trading using opposite Bank of Hawaii and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Hawaii 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.| Bank of Hawaii vs. Truist Financial | Bank of Hawaii vs. Truist Financial | Bank of Hawaii vs. MetLife Preferred Stock | Bank of Hawaii vs. US Bancorp |
| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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