Correlation Between Comerica and PNC Financial
Can any of the company-specific risk be diversified away by investing in both Comerica and PNC Financial 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 PNC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and PNC Financial Services, you can compare the effects of market volatilities on Comerica and PNC Financial 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 PNC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and PNC Financial.
Diversification Opportunities for Comerica and PNC Financial
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Comerica and PNC is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and PNC Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Financial Services 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 PNC Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Financial Services has no effect on the direction of Comerica i.e., Comerica and PNC Financial go up and down completely randomly.
Pair Corralation between Comerica and PNC Financial
Considering the 90-day investment horizon Comerica is expected to generate 1.1 times less return on investment than PNC Financial. In addition to that, Comerica is 1.77 times more volatile than PNC Financial Services. It trades about 0.03 of its total potential returns per unit of risk. PNC Financial Services is currently generating about 0.06 per unit of volatility. If you would invest 13,952 in PNC Financial Services on August 27, 2024 and sell it today you would earn a total of 7,055 from holding PNC Financial Services or generate 50.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. PNC Financial Services
Performance |
| Timeline |
| Comerica |
| PNC Financial Services |
Comerica and PNC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and PNC Financial
The main advantage of trading using opposite Comerica and PNC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, PNC Financial 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 PNC Financial will offset losses from the drop in PNC Financial's long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| PNC Financial vs. Fifth Third Bancorp | PNC Financial vs. Zions Bancorporation | PNC Financial vs. Huntington Bancshares Incorporated | PNC Financial 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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