Correlation Between Comerica and Itau Unibanco
Can any of the company-specific risk be diversified away by investing in both Comerica and Itau Unibanco 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 Itau Unibanco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Itau Unibanco Banco, you can compare the effects of market volatilities on Comerica and Itau Unibanco 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 Itau Unibanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Itau Unibanco.
Diversification Opportunities for Comerica and Itau Unibanco
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Comerica and Itau is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Itau Unibanco Banco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itau Unibanco Banco 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 Itau Unibanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itau Unibanco Banco has no effect on the direction of Comerica i.e., Comerica and Itau Unibanco go up and down completely randomly.
Pair Corralation between Comerica and Itau Unibanco
Considering the 90-day investment horizon Comerica is expected to generate 1.72 times more return on investment than Itau Unibanco. However, Comerica is 1.72 times more volatile than Itau Unibanco Banco. It trades about 0.21 of its potential returns per unit of risk. Itau Unibanco Banco is currently generating about -0.24 per unit of risk. If you would invest 5,938 in Comerica on August 28, 2024 and sell it today you would earn a total of 1,335 from holding Comerica or generate 22.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. Itau Unibanco Banco
Performance |
| Timeline |
| Comerica |
| Itau Unibanco Banco |
Comerica and Itau Unibanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and Itau Unibanco
The main advantage of trading using opposite Comerica and Itau Unibanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Itau Unibanco 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 Itau Unibanco will offset losses from the drop in Itau Unibanco's long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| Itau Unibanco vs. Grupo Financiero Galicia | Itau Unibanco vs. Banco Macro SA | Itau Unibanco vs. Banco Santander Brasil | Itau Unibanco vs. Lloyds Banking 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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