Correlation Between Comerica and National Bank
Can any of the company-specific risk be diversified away by investing in both Comerica and National 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 National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and National Bank of, you can compare the effects of market volatilities on Comerica and National 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and National Bank.
Diversification Opportunities for Comerica and National Bank
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Comerica and National is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Comerica i.e., Comerica and National Bank go up and down completely randomly.
Pair Corralation between Comerica and National Bank
Considering the 90-day investment horizon Comerica is expected to generate 0.8 times more return on investment than National Bank. However, Comerica is 1.25 times less risky than National Bank. It trades about 0.09 of its potential returns per unit of risk. National Bank of is currently generating about 0.03 per unit of risk. If you would invest 4,722 in Comerica on September 4, 2024 and sell it today you would earn a total of 2,382 from holding Comerica or generate 50.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. National Bank of
Performance |
| Timeline |
| Comerica |
| National Bank |
Comerica and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and National Bank
The main advantage of trading using opposite Comerica and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, National 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 National Bank will offset losses from the drop in National Bank's long position.| Comerica vs. International Bancshares | Comerica vs. Finward Bancorp | Comerica vs. Aquagold International | Comerica vs. Thrivent High Yield |
| National Bank vs. Alpha Bank SA | National Bank vs. Eurobank Ergasias SA | National Bank vs. Piraeus Bank SA | National Bank vs. PT Bank Central |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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