Correlation Between Monks Investment and Comerica
Can any of the company-specific risk be diversified away by investing in both Monks Investment 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 Monks Investment and Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monks Investment Trust and Comerica, you can compare the effects of market volatilities on Monks Investment 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 Monks Investment with a short position of Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monks Investment and Comerica.
Diversification Opportunities for Monks Investment and Comerica
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Monks and Comerica is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and Monks Investment 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 Monks Investment Trust 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 Monks Investment i.e., Monks Investment and Comerica go up and down completely randomly.
Pair Corralation between Monks Investment and Comerica
Assuming the 90 days trading horizon Monks Investment is expected to generate 2.81 times less return on investment than Comerica. But when comparing it to its historical volatility, Monks Investment Trust is 2.67 times less risky than Comerica. It trades about 0.04 of its potential returns per unit of risk. Comerica is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,875 in Comerica on January 3, 2025 and sell it today you would earn a total of 2,043 from holding Comerica or generate 52.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.19% |
| Values | Daily Returns |
Monks Investment Trust vs. Comerica
Performance |
| Timeline |
| Monks Investment Trust |
| Comerica |
Monks Investment and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monks Investment and Comerica
The main advantage of trading using opposite Monks Investment and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monks Investment 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.| Monks Investment vs. Silver Bullet Data | Monks Investment vs. Gamma Communications PLC | Monks Investment vs. G5 Entertainment AB | Monks Investment vs. Zinc Media Group |
| Comerica vs. Gore Street Energy | Comerica vs. Extra Space Storage | Comerica vs. Rosslyn Data Technologies | Comerica vs. Playtech Plc |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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