Correlation Between Comerica and BDO Unibank
Can any of the company-specific risk be diversified away by investing in both Comerica and BDO Unibank 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 BDO Unibank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and BDO Unibank ADR, you can compare the effects of market volatilities on Comerica and BDO Unibank 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 BDO Unibank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and BDO Unibank.
Diversification Opportunities for Comerica and BDO Unibank
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Comerica and BDO is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and BDO Unibank ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BDO Unibank ADR 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 BDO Unibank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BDO Unibank ADR has no effect on the direction of Comerica i.e., Comerica and BDO Unibank go up and down completely randomly.
Pair Corralation between Comerica and BDO Unibank
Considering the 90-day investment horizon Comerica is expected to generate 1.06 times more return on investment than BDO Unibank. However, Comerica is 1.06 times more volatile than BDO Unibank ADR. It trades about 0.09 of its potential returns per unit of risk. BDO Unibank ADR is currently generating about 0.05 per unit of risk. If you would invest 4,722 in Comerica on September 5, 2024 and sell it today you would earn a total of 2,358 from holding Comerica or generate 49.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. BDO Unibank ADR
Performance |
| Timeline |
| Comerica |
| BDO Unibank ADR |
Comerica and BDO Unibank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and BDO Unibank
The main advantage of trading using opposite Comerica and BDO Unibank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, BDO Unibank 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 BDO Unibank will offset losses from the drop in BDO Unibank's long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| BDO Unibank vs. Swedbank AB | BDO Unibank vs. United Overseas Bank | BDO Unibank vs. KBC Groep NV | BDO Unibank vs. Jyske Bank AS |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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