Correlation Between Comerica and William Penn
Can any of the company-specific risk be diversified away by investing in both Comerica and William Penn 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 William Penn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and William Penn Bancorp, you can compare the effects of market volatilities on Comerica and William Penn 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 William Penn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and William Penn.
Diversification Opportunities for Comerica and William Penn
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Comerica and William is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and William Penn Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Penn 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 William Penn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Penn Bancorp has no effect on the direction of Comerica i.e., Comerica and William Penn go up and down completely randomly.
Pair Corralation between Comerica and William Penn
Considering the 90-day investment horizon Comerica is expected to generate 1.78 times more return on investment than William Penn. However, Comerica is 1.78 times more volatile than William Penn Bancorp. It trades about 0.2 of its potential returns per unit of risk. William Penn Bancorp is currently generating about 0.2 per unit of risk. If you would invest 6,294 in Comerica on August 25, 2024 and sell it today you would earn a total of 815.00 from holding Comerica or generate 12.95% 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. William Penn Bancorp
Performance |
| Timeline |
| Comerica |
| William Penn Bancorp |
Comerica and William Penn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and William Penn
The main advantage of trading using opposite Comerica and William Penn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, William Penn 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 William Penn will offset losses from the drop in William Penn's long position.| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
| William Penn vs. Fifth Third Bancorp | William Penn vs. Zions Bancorporation | William Penn vs. Huntington Bancshares Incorporated | William Penn vs. PNC Financial Services |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |