Correlation Between PB Bankshares and Comerica
Can any of the company-specific risk be diversified away by investing in both PB Bankshares 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 PB Bankshares and Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PB Bankshares and Comerica, you can compare the effects of market volatilities on PB Bankshares 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 PB Bankshares with a short position of Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of PB Bankshares and Comerica.
Diversification Opportunities for PB Bankshares and Comerica
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PBBK and Comerica is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding PB Bankshares and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and PB Bankshares 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 PB Bankshares 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 PB Bankshares i.e., PB Bankshares and Comerica go up and down completely randomly.
Pair Corralation between PB Bankshares and Comerica
Given the investment horizon of 90 days PB Bankshares is expected to generate 1.44 times more return on investment than Comerica. However, PB Bankshares is 1.44 times more volatile than Comerica. It trades about 0.17 of its potential returns per unit of risk. Comerica is currently generating about -0.19 per unit of risk. If you would invest 1,458 in PB Bankshares on September 14, 2024 and sell it today you would earn a total of 95.00 from holding PB Bankshares or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PB Bankshares vs. Comerica
Performance |
| Timeline |
| PB Bankshares |
| Comerica |
PB Bankshares and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PB Bankshares and Comerica
The main advantage of trading using opposite PB Bankshares and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PB Bankshares 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.| PB Bankshares vs. Comerica | PB Bankshares vs. Truist Financial Corp | PB Bankshares vs. Fifth Third Bancorp | PB Bankshares 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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