Correlation Between Comerica and First Bancshares,
Can any of the company-specific risk be diversified away by investing in both Comerica and First Bancshares, 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 First Bancshares, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and The First Bancshares,, you can compare the effects of market volatilities on Comerica and First Bancshares, 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 First Bancshares,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and First Bancshares,.
Diversification Opportunities for Comerica and First Bancshares,
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Comerica and First is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and The First Bancshares, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancshares, 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 First Bancshares,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancshares, has no effect on the direction of Comerica i.e., Comerica and First Bancshares, go up and down completely randomly.
Pair Corralation between Comerica and First Bancshares,
Considering the 90-day investment horizon Comerica is expected to generate 0.86 times more return on investment than First Bancshares,. However, Comerica is 1.16 times less risky than First Bancshares,. It trades about 0.2 of its potential returns per unit of risk. The First Bancshares, is currently generating about 0.14 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 778.00 from holding Comerica or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. The First Bancshares,
Performance |
| Timeline |
| Comerica |
| First Bancshares, |
Comerica and First Bancshares, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and First Bancshares,
The main advantage of trading using opposite Comerica and First Bancshares, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, First Bancshares, 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 First Bancshares, will offset losses from the drop in First Bancshares,'s long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| First Bancshares, vs. First Northwest Bancorp | First Bancshares, vs. Community West Bancshares | First Bancshares, vs. First Financial Northwest | First Bancshares, vs. Great Southern 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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