Correlation Between Comerica and SpareBank
Can any of the company-specific risk be diversified away by investing in both Comerica and SpareBank 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 SpareBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and SpareBank 1 SMN, you can compare the effects of market volatilities on Comerica and SpareBank 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 SpareBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and SpareBank.
Diversification Opportunities for Comerica and SpareBank
Pay attention - limited upside
The 3 months correlation between Comerica and SpareBank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and SpareBank 1 SMN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpareBank 1 SMN 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 SpareBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpareBank 1 SMN has no effect on the direction of Comerica i.e., Comerica and SpareBank go up and down completely randomly.
Pair Corralation between Comerica and SpareBank
Considering the 90-day investment horizon Comerica is expected to generate 4.29 times more return on investment than SpareBank. However, Comerica is 4.29 times more volatile than SpareBank 1 SMN. It trades about 0.09 of its potential returns per unit of risk. SpareBank 1 SMN is currently generating about 0.06 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 | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Comerica vs. SpareBank 1 SMN
Performance |
| Timeline |
| Comerica |
| SpareBank 1 SMN |
Comerica and SpareBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and SpareBank
The main advantage of trading using opposite Comerica and SpareBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, SpareBank 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 SpareBank will offset losses from the drop in SpareBank's long position.| Comerica vs. International Bancshares | Comerica vs. Finward Bancorp | Comerica vs. Aquagold International | Comerica vs. Thrivent High Yield |
| SpareBank vs. Danske Bank AS | SpareBank vs. Erste Group Bank | SpareBank vs. Texas Community Bancshares | SpareBank vs. Richmond Mutual Bancorporation |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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