Correlation Between Cornish Metals and Comerica
Can any of the company-specific risk be diversified away by investing in both Cornish Metals and Comerica 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 Cornish Metals and Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Comerica, you can compare the effects of market volatilities on Cornish Metals and Comerica 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 Cornish Metals with a short position of Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Comerica.
Diversification Opportunities for Cornish Metals and Comerica
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cornish and Comerica is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and Cornish Metals 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 Cornish Metals are associated (or correlated) with Comerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comerica has no effect on the direction of Cornish Metals i.e., Cornish Metals and Comerica go up and down completely randomly.
Pair Corralation between Cornish Metals and Comerica
Assuming the 90 days trading horizon Cornish Metals is expected to under-perform the Comerica. In addition to that, Cornish Metals is 1.16 times more volatile than Comerica. It trades about -0.04 of its total potential returns per unit of risk. Comerica is currently generating about 0.06 per unit of volatility. If you would invest 6,276 in Comerica on November 28, 2024 and sell it today you would earn a total of 126.00 from holding Comerica or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Cornish Metals vs. Comerica
Performance |
| Timeline |
| Cornish Metals |
| Comerica |
Cornish Metals and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and Comerica
The main advantage of trading using opposite Cornish Metals and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals position performs unexpectedly, Comerica 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 Comerica will offset losses from the drop in Comerica's long position.| Cornish Metals vs. Hochschild Mining plc | Cornish Metals vs. National Beverage Corp | Cornish Metals vs. Eastman Chemical Co | Cornish Metals vs. BW Offshore |
| Comerica vs. Gaming Realms plc | Comerica vs. Wyndham Hotels Resorts | Comerica vs. Broadcom | Comerica vs. Dalata Hotel Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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