Correlation Between Comerica and Bar Harbor
Can any of the company-specific risk be diversified away by investing in both Comerica and Bar Harbor 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 Bar Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Bar Harbor Bankshares, you can compare the effects of market volatilities on Comerica and Bar Harbor 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 Bar Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Bar Harbor.
Diversification Opportunities for Comerica and Bar Harbor
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Comerica and Bar is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Bar Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bar Harbor Bankshares 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 Bar Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bar Harbor Bankshares has no effect on the direction of Comerica i.e., Comerica and Bar Harbor go up and down completely randomly.
Pair Corralation between Comerica and Bar Harbor
Considering the 90-day investment horizon Comerica is expected to generate 0.7 times more return on investment than Bar Harbor. However, Comerica is 1.43 times less risky than Bar Harbor. It trades about 0.26 of its potential returns per unit of risk. Bar Harbor Bankshares is currently generating about 0.12 per unit of risk. If you would invest 6,267 in Comerica on August 28, 2024 and sell it today you would earn a total of 1,006 from holding Comerica or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. Bar Harbor Bankshares
Performance |
| Timeline |
| Comerica |
| Bar Harbor Bankshares |
Comerica and Bar Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and Bar Harbor
The main advantage of trading using opposite Comerica and Bar Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Bar Harbor 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 Bar Harbor will offset losses from the drop in Bar Harbor's long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| Bar Harbor vs. Fifth Third Bancorp | Bar Harbor vs. Zions Bancorporation | Bar Harbor vs. Huntington Bancshares Incorporated | Bar Harbor vs. Comerica |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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