Correlation Between Comerica and Timberland Bancorp
Can any of the company-specific risk be diversified away by investing in both Comerica and Timberland Bancorp 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 Timberland Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Timberland Bancorp, you can compare the effects of market volatilities on Comerica and Timberland Bancorp 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 Timberland Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Timberland Bancorp.
Diversification Opportunities for Comerica and Timberland Bancorp
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Comerica and Timberland is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Timberland Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timberland 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 Timberland Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timberland Bancorp has no effect on the direction of Comerica i.e., Comerica and Timberland Bancorp go up and down completely randomly.
Pair Corralation between Comerica and Timberland Bancorp
Considering the 90-day investment horizon Comerica is expected to generate 1.65 times more return on investment than Timberland Bancorp. However, Comerica is 1.65 times more volatile than Timberland Bancorp. It trades about 0.02 of its potential returns per unit of risk. Timberland Bancorp is currently generating about 0.02 per unit of risk. If you would invest 5,954 in Comerica on September 13, 2024 and sell it today you would earn a total of 717.00 from holding Comerica or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. Timberland Bancorp
Performance |
| Timeline |
| Comerica |
| Timberland Bancorp |
Comerica and Timberland Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and Timberland Bancorp
The main advantage of trading using opposite Comerica and Timberland Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Timberland Bancorp 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 Timberland Bancorp will offset losses from the drop in Timberland Bancorp's long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| Timberland Bancorp vs. Comerica | Timberland Bancorp vs. Truist Financial Corp | Timberland Bancorp vs. Fifth Third Bancorp | Timberland Bancorp vs. Zions 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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