Correlation Between Comerica and BCB Bancorp
Can any of the company-specific risk be diversified away by investing in both Comerica and BCB Bancorp 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 Comerica and BCB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and BCB Bancorp, you can compare the effects of market volatilities on Comerica and BCB Bancorp 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 Comerica with a short position of BCB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and BCB Bancorp.
Diversification Opportunities for Comerica and BCB Bancorp
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Comerica and BCB is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and BCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCB Bancorp and Comerica 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 Comerica are associated (or correlated) with BCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCB Bancorp has no effect on the direction of Comerica i.e., Comerica and BCB Bancorp go up and down completely randomly.
Pair Corralation between Comerica and BCB Bancorp
Considering the 90-day investment horizon Comerica is expected to generate 1.36 times more return on investment than BCB Bancorp. However, Comerica is 1.36 times more volatile than BCB Bancorp. It trades about 0.2 of its potential returns per unit of risk. BCB Bancorp is currently generating about 0.19 per unit of risk. If you would invest 6,447 in Comerica on August 31, 2024 and sell it today you would earn a total of 785.00 from holding Comerica or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. BCB Bancorp
Performance |
| Timeline |
| Comerica |
| BCB Bancorp |
Comerica and BCB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and BCB Bancorp
The main advantage of trading using opposite Comerica and BCB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, BCB Bancorp 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 BCB Bancorp will offset losses from the drop in BCB Bancorp's long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| BCB Bancorp vs. Provident Financial Services | BCB Bancorp vs. First Mid Illinois | BCB Bancorp vs. ConnectOne Bancorp | BCB Bancorp vs. Finward Bancorp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |