Correlation Between Comerica and First National
Can any of the company-specific risk be diversified away by investing in both Comerica and First National 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 National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and First National Corp, you can compare the effects of market volatilities on Comerica and First National 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 National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and First National.
Diversification Opportunities for Comerica and First National
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Comerica and First is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and First National Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National 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 First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National Corp has no effect on the direction of Comerica i.e., Comerica and First National go up and down completely randomly.
Pair Corralation between Comerica and First National
Considering the 90-day investment horizon Comerica is expected to generate 1.42 times more return on investment than First National. However, Comerica is 1.42 times more volatile than First National Corp. It trades about 0.26 of its potential returns per unit of risk. First National Corp is currently generating about 0.29 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. First National Corp
Performance |
| Timeline |
| Comerica |
| First National Corp |
Comerica and First National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and First National
The main advantage of trading using opposite Comerica and First National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, First National 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 National will offset losses from the drop in First National's long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| First National vs. Fifth Third Bancorp | First National vs. Zions Bancorporation | First National vs. Huntington Bancshares Incorporated | First National 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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