Correlation Between Comerica and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both Comerica and Metropolitan Bank 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 Metropolitan Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Metropolitan Bank and, you can compare the effects of market volatilities on Comerica and Metropolitan Bank 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 Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Metropolitan Bank.
Diversification Opportunities for Comerica and Metropolitan Bank
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Comerica and Metropolitan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Metropolitan Bank and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Bank 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 Metropolitan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Bank has no effect on the direction of Comerica i.e., Comerica and Metropolitan Bank go up and down completely randomly.
Pair Corralation between Comerica and Metropolitan Bank
If you would invest 2,774 in Metropolitan Bank and on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Metropolitan Bank and or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. Metropolitan Bank and
Performance |
| Timeline |
| Comerica |
| Metropolitan Bank |
Comerica and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and Metropolitan Bank
The main advantage of trading using opposite Comerica and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Metropolitan Bank 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 Metropolitan Bank will offset losses from the drop in Metropolitan Bank's long position.| Comerica vs. JPMorgan Chase Co | Comerica vs. Citigroup | Comerica vs. Wells Fargo | Comerica vs. Toronto Dominion Bank |
| Metropolitan Bank vs. Harmony Gold Mining | Metropolitan Bank vs. Casio Computer Co | Metropolitan Bank vs. RadNet Inc | Metropolitan Bank vs. Paiute Oil Mining |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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