Correlation Between US Bancorp and Comerica
Can any of the company-specific risk be diversified away by investing in both US 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 US Bancorp and Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Bancorp and Comerica, you can compare the effects of market volatilities on US 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 US Bancorp with a short position of Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and Comerica.
Diversification Opportunities for US Bancorp and Comerica
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between USB and Comerica is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and US 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 US 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 US Bancorp i.e., US Bancorp and Comerica go up and down completely randomly.
Pair Corralation between US Bancorp and Comerica
Considering the 90-day investment horizon US Bancorp is expected to generate 2.95 times less return on investment than Comerica. In addition to that, US Bancorp is 1.21 times more volatile than Comerica. It trades about 0.09 of its total potential returns per unit of risk. Comerica is currently generating about 0.32 per unit of volatility. If you would invest 6,001 in Comerica on October 20, 2024 and sell it today you would earn a total of 609.00 from holding Comerica or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Bancorp vs. Comerica
Performance |
| Timeline |
| US Bancorp |
| Comerica |
US Bancorp and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Bancorp and Comerica
The main advantage of trading using opposite US Bancorp and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US 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.| US Bancorp vs. PNC Financial Services | US Bancorp vs. KeyCorp | US Bancorp vs. Zions Bancorporation | US Bancorp vs. Fifth Third Bancorp |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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