Correlation Between Comerica and Bank Central
Can any of the company-specific risk be diversified away by investing in both Comerica and Bank Central 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 Bank Central into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Bank Central Asia, you can compare the effects of market volatilities on Comerica and Bank Central 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 Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Bank Central.
Diversification Opportunities for Comerica and Bank Central
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Comerica and Bank is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia 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 Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of Comerica i.e., Comerica and Bank Central go up and down completely randomly.
Pair Corralation between Comerica and Bank Central
Considering the 90-day investment horizon Comerica is expected to generate 1.46 times more return on investment than Bank Central. However, Comerica is 1.46 times more volatile than Bank Central Asia. It trades about 0.09 of its potential returns per unit of risk. Bank Central Asia is currently generating about 0.05 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 2,358 from holding Comerica or generate 49.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Comerica vs. Bank Central Asia
Performance |
| Timeline |
| Comerica |
| Bank Central Asia |
Comerica and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and Bank Central
The main advantage of trading using opposite Comerica and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Bank Central 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 Bank Central will offset losses from the drop in Bank Central's long position.| Comerica vs. International Bancshares | Comerica vs. Finward Bancorp | Comerica vs. Aquagold International | Comerica vs. Thrivent High Yield |
| Bank Central vs. First Hawaiian | Bank Central vs. Central Pacific Financial | Bank Central vs. Territorial Bancorp | Bank Central vs. Comerica |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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