Correlation Between Comerica and Virginia National
Can any of the company-specific risk be diversified away by investing in both Comerica and Virginia National 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 Virginia National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Virginia National Bankshares, you can compare the effects of market volatilities on Comerica and Virginia National 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 Virginia National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Virginia National.
Diversification Opportunities for Comerica and Virginia National
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Comerica and Virginia is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Virginia National Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virginia National 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 Virginia National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virginia National has no effect on the direction of Comerica i.e., Comerica and Virginia National go up and down completely randomly.
Pair Corralation between Comerica and Virginia National
Considering the 90-day investment horizon Comerica is expected to generate 1.66 times more return on investment than Virginia National. However, Comerica is 1.66 times more volatile than Virginia National Bankshares. It trades about 0.2 of its potential returns per unit of risk. Virginia National Bankshares is currently generating about 0.15 per unit of risk. If you would invest 6,447 in Comerica on August 31, 2024 and sell it today you would earn a total of 785.00 from holding Comerica or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. Virginia National Bankshares
Performance |
| Timeline |
| Comerica |
| Virginia National |
Comerica and Virginia National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and Virginia National
The main advantage of trading using opposite Comerica and Virginia National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Virginia National 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 Virginia National will offset losses from the drop in Virginia National's long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| Virginia National vs. Finward Bancorp | Virginia National vs. Community West Bancshares | Virginia National vs. First Financial Northwest | Virginia National vs. Oak Valley Bancorp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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