Correlation Between Comerica and Nmb Financial
Can any of the company-specific risk be diversified away by investing in both Comerica and Nmb Financial 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 Comerica and Nmb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Nmb Financial Corp, you can compare the effects of market volatilities on Comerica and Nmb Financial 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 Comerica with a short position of Nmb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Nmb Financial.
Diversification Opportunities for Comerica and Nmb Financial
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Comerica and Nmb is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Nmb Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nmb Financial Corp and Comerica 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 Comerica are associated (or correlated) with Nmb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nmb Financial Corp has no effect on the direction of Comerica i.e., Comerica and Nmb Financial go up and down completely randomly.
Pair Corralation between Comerica and Nmb Financial
Considering the 90-day investment horizon Comerica is expected to generate 1.13 times less return on investment than Nmb Financial. In addition to that, Comerica is 1.43 times more volatile than Nmb Financial Corp. It trades about 0.21 of its total potential returns per unit of risk. Nmb Financial Corp is currently generating about 0.33 per unit of volatility. If you would invest 1,026 in Nmb Financial Corp on September 6, 2024 and sell it today you would earn a total of 374.00 from holding Nmb Financial Corp or generate 36.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Comerica vs. Nmb Financial Corp
Performance |
Timeline |
Comerica |
Nmb Financial Corp |
Comerica and Nmb Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Comerica and Nmb Financial
The main advantage of trading using opposite Comerica and Nmb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Nmb Financial 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 Nmb Financial will offset losses from the drop in Nmb Financial's long position.Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions Bancorporation |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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