Correlation Between Citigroup and Comerica
Can any of the company-specific risk be diversified away by investing in both Citigroup 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 Citigroup and Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Comerica, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Comerica.
Diversification Opportunities for Citigroup and Comerica
Almost no diversification
The 3 months correlation between Citigroup and Comerica is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and Citigroup 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 Citigroup 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 Citigroup i.e., Citigroup and Comerica go up and down completely randomly.
Pair Corralation between Citigroup and Comerica
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.84 times more return on investment than Comerica. However, Citigroup is 1.2 times less risky than Comerica. It trades about 0.12 of its potential returns per unit of risk. Comerica is currently generating about 0.09 per unit of risk. If you would invest 6,543 in Citigroup on September 13, 2024 and sell it today you would earn a total of 630.00 from holding Citigroup or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Comerica
Performance |
| Timeline |
| Citigroup |
| Comerica |
Citigroup and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Comerica
The main advantage of trading using opposite Citigroup and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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