Correlation Between Associated Banc and Comerica

Can any of the company-specific risk be diversified away by investing in both Associated Banc 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 Associated Banc and Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Associated Banc Corp and Comerica, you can compare the effects of market volatilities on Associated Banc 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 Associated Banc with a short position of Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Banc and Comerica.

Diversification Opportunities for Associated Banc and Comerica

0.97

Correlation Coefficient

Associated Banc  Comerica

Almost no diversification

The 3 months correlation between Associated and Comerica is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Associated Banc Corp and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and Associated Banc 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 Associated Banc Corp 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 Associated Banc i.e., Associated Banc and Comerica go up and down completely randomly.

Pair Corralation between Associated Banc and Comerica

Considering the 90-day investment horizon Associated Banc Corp is expected to generate 1.32 times more return on investment than Comerica. However, Associated Banc is 1.32 times more volatile than Comerica. It trades about 0.14 of its potential returns per unit of risk. Comerica is currently generating about 0.09 per unit of risk. If you would invest  2,190  in Associated Banc Corp on September 13, 2024 and sell it today you would earn a total of  396.00  from holding Associated Banc Corp or generate 18.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Associated Banc Corp  vs.  Comerica

Associated Banc Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Banc Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Associated Banc sustained solid returns over the last few months and may actually be approaching a breakup point.

Comerica

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Comerica are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting primary indicators, Comerica sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Associated Banc and Comerica

The main advantage of trading using opposite Associated Banc and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Banc 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.

The idea behind Associated Banc Corp and Comerica pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.