Correlation Between Comerica and Bank Rakyat
Can any of the company-specific risk be diversified away by investing in both Comerica and Bank Rakyat 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 Rakyat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Bank Rakyat, you can compare the effects of market volatilities on Comerica and Bank Rakyat 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 Rakyat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Bank Rakyat.
Diversification Opportunities for Comerica and Bank Rakyat
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Comerica and Bank is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Rakyat 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 Rakyat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Rakyat has no effect on the direction of Comerica i.e., Comerica and Bank Rakyat go up and down completely randomly.
Pair Corralation between Comerica and Bank Rakyat
Considering the 90-day investment horizon Comerica is expected to under-perform the Bank Rakyat. But the stock apears to be less risky and, when comparing its historical volatility, Comerica is 1.25 times less risky than Bank Rakyat. The stock trades about -0.17 of its potential returns per unit of risk. The Bank Rakyat is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,392 in Bank Rakyat on September 13, 2024 and sell it today you would lose (38.00) from holding Bank Rakyat or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. Bank Rakyat
Performance |
| Timeline |
| Comerica |
| Bank Rakyat |
Comerica and Bank Rakyat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and Bank Rakyat
The main advantage of trading using opposite Comerica and Bank Rakyat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Bank Rakyat 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 Rakyat will offset losses from the drop in Bank Rakyat's long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| Bank Rakyat vs. Bank Mandiri Persero | Bank Rakyat vs. Eurobank Ergasias Services | Bank Rakyat vs. Nedbank Group | Bank Rakyat vs. Standard Bank Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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