Correlation Between Comerica and Bank of East
Can any of the company-specific risk be diversified away by investing in both Comerica and Bank of East 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 Bank of East into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Bank of East, you can compare the effects of market volatilities on Comerica and Bank of East 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 Bank of East. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Bank of East.
Diversification Opportunities for Comerica and Bank of East
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Comerica and Bank is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Bank of East in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of East 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 Bank of East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of East has no effect on the direction of Comerica i.e., Comerica and Bank of East go up and down completely randomly.
Pair Corralation between Comerica and Bank of East
Considering the 90-day investment horizon Comerica is expected to under-perform the Bank of East. In addition to that, Comerica is 1.2 times more volatile than Bank of East. It trades about -0.17 of its total potential returns per unit of risk. Bank of East is currently generating about -0.03 per unit of volatility. If you would invest 123.00 in Bank of East on September 13, 2024 and sell it today you would lose (1.00) from holding Bank of East or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. Bank of East
Performance |
| Timeline |
| Comerica |
| Bank of East |
Comerica and Bank of East Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and Bank of East
The main advantage of trading using opposite Comerica and Bank of East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Bank of East 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 Bank of East will offset losses from the drop in Bank of East's long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| Bank of East vs. PT Bank Rakyat | Bank of East vs. Morningstar Unconstrained Allocation | Bank of East vs. Bondbloxx ETF Trust | Bank of East vs. Spring Valley Acquisition |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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