Correlation Between Comerica and FNB Corp
Can any of the company-specific risk be diversified away by investing in both Comerica and FNB Corp 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 FNB Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and FNB Corp, you can compare the effects of market volatilities on Comerica and FNB Corp 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 FNB Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and FNB Corp.
Diversification Opportunities for Comerica and FNB Corp
Very poor diversification
The 3 months correlation between Comerica and FNB is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and FNB Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB Corp 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 FNB Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB Corp has no effect on the direction of Comerica i.e., Comerica and FNB Corp go up and down completely randomly.
Pair Corralation between Comerica and FNB Corp
Considering the 90-day investment horizon Comerica is expected to generate 1.67 times more return on investment than FNB Corp. However, Comerica is 1.67 times more volatile than FNB Corp. It trades about 0.03 of its potential returns per unit of risk. FNB Corp is currently generating about 0.05 per unit of risk. If you would invest 5,833 in Comerica on August 28, 2024 and sell it today you would earn a total of 1,440 from holding Comerica or generate 24.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. FNB Corp
Performance |
| Timeline |
| Comerica |
| FNB Corp |
Comerica and FNB Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and FNB Corp
The main advantage of trading using opposite Comerica and FNB Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, FNB Corp 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 FNB Corp will offset losses from the drop in FNB Corp's long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| FNB Corp vs. Fifth Third Bancorp | FNB Corp vs. Zions Bancorporation | FNB Corp vs. Huntington Bancshares Incorporated | FNB Corp 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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