Correlation Between Commerce Bancshares and BOK Financial
Can any of the company-specific risk be diversified away by investing in both Commerce Bancshares and BOK Financial 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 Commerce Bancshares and BOK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerce Bancshares and BOK Financial, you can compare the effects of market volatilities on Commerce Bancshares and BOK Financial 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 Commerce Bancshares with a short position of BOK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerce Bancshares and BOK Financial.
Diversification Opportunities for Commerce Bancshares and BOK Financial
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Commerce and BOK is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Commerce Bancshares and BOK Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOK Financial and Commerce Bancshares 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 Commerce Bancshares are associated (or correlated) with BOK Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOK Financial has no effect on the direction of Commerce Bancshares i.e., Commerce Bancshares and BOK Financial go up and down completely randomly.
Pair Corralation between Commerce Bancshares and BOK Financial
Given the investment horizon of 90 days Commerce Bancshares is expected to generate 0.81 times more return on investment than BOK Financial. However, Commerce Bancshares is 1.23 times less risky than BOK Financial. It trades about 0.31 of its potential returns per unit of risk. BOK Financial is currently generating about 0.15 per unit of risk. If you would invest 6,175 in Commerce Bancshares on November 2, 2024 and sell it today you would earn a total of 434.00 from holding Commerce Bancshares or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commerce Bancshares vs. BOK Financial
Performance |
| Timeline |
| Commerce Bancshares |
| BOK Financial |
Commerce Bancshares and BOK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerce Bancshares and BOK Financial
The main advantage of trading using opposite Commerce Bancshares and BOK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerce Bancshares position performs unexpectedly, BOK Financial 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 BOK Financial will offset losses from the drop in BOK Financial's long position.| Commerce Bancshares vs. BOK Financial | Commerce Bancshares vs. Texas Capital Bancshares | Commerce Bancshares vs. United Bankshares | Commerce Bancshares vs. Prosperity Bancshares |
| BOK Financial vs. First Financial Bankshares | BOK Financial vs. Auburn National Bancorporation | BOK Financial vs. Great Southern Bancorp | BOK Financial vs. First Guaranty Bancshares |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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