Correlation Between PacWest Bancorp and Comerica
Can any of the company-specific risk be diversified away by investing in both PacWest 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 PacWest Bancorp and Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PacWest Bancorp and Comerica, you can compare the effects of market volatilities on PacWest 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 PacWest Bancorp with a short position of Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of PacWest Bancorp and Comerica.
Diversification Opportunities for PacWest Bancorp and Comerica
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between PacWest and Comerica is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding PacWest Bancorp and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and PacWest 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 PacWest 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 PacWest Bancorp i.e., PacWest Bancorp and Comerica go up and down completely randomly.
Pair Corralation between PacWest Bancorp and Comerica
If you would invest 4,910 in Comerica on August 24, 2024 and sell it today you would earn a total of 1,980 from holding Comerica or generate 40.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.8% |
| Values | Daily Returns |
PacWest Bancorp vs. Comerica
Performance |
| Timeline |
| PacWest Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Comerica |
PacWest Bancorp and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PacWest Bancorp and Comerica
The main advantage of trading using opposite PacWest Bancorp and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PacWest 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.| PacWest Bancorp vs. Zions Bancorporation | PacWest Bancorp vs. KeyCorp | PacWest Bancorp vs. Comerica | PacWest Bancorp vs. First Horizon National |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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