Correlation Between NSTS Bancorp and Comerica
Can any of the company-specific risk be diversified away by investing in both NSTS Bancorp 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 NSTS Bancorp and Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NSTS Bancorp and Comerica, you can compare the effects of market volatilities on NSTS Bancorp 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 NSTS Bancorp with a short position of Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of NSTS Bancorp and Comerica.
Diversification Opportunities for NSTS Bancorp and Comerica
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NSTS and Comerica is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding NSTS Bancorp and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and NSTS Bancorp 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 NSTS Bancorp 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 NSTS Bancorp i.e., NSTS Bancorp and Comerica go up and down completely randomly.
Pair Corralation between NSTS Bancorp and Comerica
Given the investment horizon of 90 days NSTS Bancorp is expected to generate 0.69 times more return on investment than Comerica. However, NSTS Bancorp is 1.44 times less risky than Comerica. It trades about 0.06 of its potential returns per unit of risk. Comerica is currently generating about -0.17 per unit of risk. If you would invest 1,115 in NSTS Bancorp on September 13, 2024 and sell it today you would earn a total of 11.00 from holding NSTS Bancorp or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NSTS Bancorp vs. Comerica
Performance |
| Timeline |
| NSTS Bancorp |
| Comerica |
NSTS Bancorp and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NSTS Bancorp and Comerica
The main advantage of trading using opposite NSTS Bancorp and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NSTS Bancorp 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.| NSTS Bancorp vs. Comerica | NSTS Bancorp vs. Truist Financial Corp | NSTS Bancorp vs. Fifth Third Bancorp | NSTS Bancorp vs. Zions Bancorporation |
| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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