Correlation Between Citizens Financial and Comerica
Can any of the company-specific risk be diversified away by investing in both Citizens Financial 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 Citizens Financial and Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Financial Group, and Comerica, you can compare the effects of market volatilities on Citizens Financial 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 Citizens Financial with a short position of Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and Comerica.
Diversification Opportunities for Citizens Financial and Comerica
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citizens and Comerica is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group, and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and Citizens Financial 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 Citizens Financial Group, 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 Citizens Financial i.e., Citizens Financial and Comerica go up and down completely randomly.
Pair Corralation between Citizens Financial and Comerica
Considering the 90-day investment horizon Citizens Financial Group, is expected to generate 0.74 times more return on investment than Comerica. However, Citizens Financial Group, is 1.36 times less risky than Comerica. It trades about 0.04 of its potential returns per unit of risk. Comerica is currently generating about 0.03 per unit of risk. If you would invest 3,573 in Citizens Financial Group, on August 24, 2024 and sell it today you would earn a total of 1,104 from holding Citizens Financial Group, or generate 30.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group, vs. Comerica
Performance |
| Timeline |
| Citizens Financial Group, |
| Comerica |
Citizens Financial and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and Comerica
The main advantage of trading using opposite Citizens Financial and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial 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.| Citizens Financial vs. PNC Financial Services | Citizens Financial vs. Regions Financial | Citizens Financial vs. Fifth Third Bancorp | Citizens Financial vs. Comerica |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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