Correlation Between Miton UK and Comerica
Can any of the company-specific risk be diversified away by investing in both Miton UK 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 Miton UK and Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miton UK MicroCap and Comerica, you can compare the effects of market volatilities on Miton UK 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 Miton UK with a short position of Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miton UK and Comerica.
Diversification Opportunities for Miton UK and Comerica
Pay attention - limited upside
The 3 months correlation between Miton and Comerica is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Miton UK MicroCap and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and Miton UK 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 Miton UK MicroCap 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 Miton UK i.e., Miton UK and Comerica go up and down completely randomly.
Pair Corralation between Miton UK and Comerica
Assuming the 90 days trading horizon Miton UK is expected to generate 5.94 times less return on investment than Comerica. But when comparing it to its historical volatility, Miton UK MicroCap is 4.73 times less risky than Comerica. It trades about 0.22 of its potential returns per unit of risk. Comerica is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 6,287 in Comerica on August 30, 2024 and sell it today you would earn a total of 949.00 from holding Comerica or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miton UK MicroCap vs. Comerica
Performance |
| Timeline |
| Miton UK MicroCap |
| Comerica |
Miton UK and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miton UK and Comerica
The main advantage of trading using opposite Miton UK and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miton UK 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.| Miton UK vs. Made Tech Group | Miton UK vs. Ashtead Technology Holdings | Miton UK vs. Seraphim Space Investment | Miton UK vs. Monster Beverage Corp |
| Comerica vs. McEwen Mining | Comerica vs. Take Two Interactive Software | Comerica vs. Southern Copper Corp | Comerica vs. Cornish Metals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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