Correlation Between OptimumBank Holdings and Comerica
Can any of the company-specific risk be diversified away by investing in both OptimumBank Holdings 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 OptimumBank Holdings and Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OptimumBank Holdings and Comerica, you can compare the effects of market volatilities on OptimumBank Holdings 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 OptimumBank Holdings with a short position of Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of OptimumBank Holdings and Comerica.
Diversification Opportunities for OptimumBank Holdings and Comerica
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OptimumBank and Comerica is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding OptimumBank Holdings and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and OptimumBank Holdings 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 OptimumBank Holdings 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 OptimumBank Holdings i.e., OptimumBank Holdings and Comerica go up and down completely randomly.
Pair Corralation between OptimumBank Holdings and Comerica
Given the investment horizon of 90 days OptimumBank Holdings is expected to generate 1.27 times more return on investment than Comerica. However, OptimumBank Holdings is 1.27 times more volatile than Comerica. It trades about -0.07 of its potential returns per unit of risk. Comerica is currently generating about -0.19 per unit of risk. If you would invest 508.00 in OptimumBank Holdings on September 15, 2024 and sell it today you would lose (14.00) from holding OptimumBank Holdings or give up 2.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OptimumBank Holdings vs. Comerica
Performance |
| Timeline |
| OptimumBank Holdings |
| Comerica |
OptimumBank Holdings and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OptimumBank Holdings and Comerica
The main advantage of trading using opposite OptimumBank Holdings and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OptimumBank Holdings 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.| OptimumBank Holdings vs. Comerica | OptimumBank Holdings vs. Fifth Third Bancorp | OptimumBank Holdings vs. Zions Bancorporation | OptimumBank Holdings vs. PNC Financial Services |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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