Correlation Between Comerica and Midland States
Can any of the company-specific risk be diversified away by investing in both Comerica and Midland States 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 Midland States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Midland States Bancorp, you can compare the effects of market volatilities on Comerica and Midland States 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 Midland States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Midland States.
Diversification Opportunities for Comerica and Midland States
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Comerica and Midland is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Midland States Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midland States 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 Midland States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midland States Bancorp has no effect on the direction of Comerica i.e., Comerica and Midland States go up and down completely randomly.
Pair Corralation between Comerica and Midland States
Considering the 90-day investment horizon Comerica is expected to generate 3.9 times more return on investment than Midland States. However, Comerica is 3.9 times more volatile than Midland States Bancorp. It trades about 0.14 of its potential returns per unit of risk. Midland States Bancorp is currently generating about 0.07 per unit of risk. If you would invest 4,649 in Comerica on September 14, 2024 and sell it today you would earn a total of 1,998 from holding Comerica or generate 42.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. Midland States Bancorp
Performance |
| Timeline |
| Comerica |
| Midland States Bancorp |
Comerica and Midland States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and Midland States
The main advantage of trading using opposite Comerica and Midland States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Midland States 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 Midland States will offset losses from the drop in Midland States' long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| Midland States vs. Texas Capital Bancshares | Midland States vs. Merchants Bancorp | Midland States vs. Wintrust Financial Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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