Correlation Between Comerica and Southern Missouri
Can any of the company-specific risk be diversified away by investing in both Comerica and Southern Missouri 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 Southern Missouri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Southern Missouri Bancorp, you can compare the effects of market volatilities on Comerica and Southern Missouri 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 Southern Missouri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Southern Missouri.
Diversification Opportunities for Comerica and Southern Missouri
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Comerica and Southern is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Southern Missouri Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Missouri 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 Southern Missouri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Missouri Bancorp has no effect on the direction of Comerica i.e., Comerica and Southern Missouri go up and down completely randomly.
Pair Corralation between Comerica and Southern Missouri
Considering the 90-day investment horizon Comerica is expected to generate 1.19 times less return on investment than Southern Missouri. In addition to that, Comerica is 1.34 times more volatile than Southern Missouri Bancorp. It trades about 0.03 of its total potential returns per unit of risk. Southern Missouri Bancorp is currently generating about 0.05 per unit of volatility. If you would invest 4,483 in Southern Missouri Bancorp on August 31, 2024 and sell it today you would earn a total of 2,082 from holding Southern Missouri Bancorp or generate 46.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Comerica vs. Southern Missouri Bancorp
Performance |
| Timeline |
| Comerica |
| Southern Missouri Bancorp |
Comerica and Southern Missouri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and Southern Missouri
The main advantage of trading using opposite Comerica and Southern Missouri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Southern Missouri 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 Southern Missouri will offset losses from the drop in Southern Missouri's long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| Southern Missouri vs. Commerzbank AG | Southern Missouri vs. Investar Holding Corp | Southern Missouri vs. Colony Bankcorp | Southern Missouri vs. Western New England |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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