Correlation Between Comerica and Heritage NOLA
Can any of the company-specific risk be diversified away by investing in both Comerica and Heritage NOLA 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 Heritage NOLA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Heritage NOLA Bancorp, you can compare the effects of market volatilities on Comerica and Heritage NOLA 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 Heritage NOLA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Heritage NOLA.
Diversification Opportunities for Comerica and Heritage NOLA
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Comerica and Heritage is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Heritage NOLA Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage NOLA Bancorp 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 Heritage NOLA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage NOLA Bancorp has no effect on the direction of Comerica i.e., Comerica and Heritage NOLA go up and down completely randomly.
Pair Corralation between Comerica and Heritage NOLA
Considering the 90-day investment horizon Comerica is expected to generate 1.12 times less return on investment than Heritage NOLA. But when comparing it to its historical volatility, Comerica is 2.12 times less risky than Heritage NOLA. It trades about 0.07 of its potential returns per unit of risk. Heritage NOLA Bancorp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 950.00 in Heritage NOLA Bancorp on September 12, 2024 and sell it today you would earn a total of 440.00 from holding Heritage NOLA Bancorp or generate 46.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. Heritage NOLA Bancorp
Performance |
| Timeline |
| Comerica |
| Heritage NOLA Bancorp |
Comerica and Heritage NOLA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and Heritage NOLA
The main advantage of trading using opposite Comerica and Heritage NOLA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Heritage NOLA 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 Heritage NOLA will offset losses from the drop in Heritage NOLA's long position.| Comerica vs. JPMorgan Chase Co | Comerica vs. Citigroup | Comerica vs. Wells Fargo | Comerica vs. Toronto Dominion Bank |
| Heritage NOLA vs. Rhinebeck Bancorp | Heritage NOLA vs. Bridgewater Bancshares Depositary | Heritage NOLA vs. Home Federal Bancorp | Heritage NOLA vs. LINKBANCORP |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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