Correlation Between Bank of Utica and Comerica

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

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

Diversification Opportunities for Bank of Utica and Comerica

0.19

Correlation Coefficient

Bank of Utica  Comerica

Average diversification

The 3 months correlation between Bank and Comerica is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Utica and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and Bank of Utica 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 Bank of Utica 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 Bank of Utica i.e., Bank of Utica and Comerica go up and down completely randomly.

Pair Corralation between Bank of Utica and Comerica

Given the investment horizon of 90 days Bank of Utica is expected to generate 0.91 times more return on investment than Comerica. However, Bank of Utica is 1.1 times less risky than Comerica. It trades about 0.03 of its potential returns per unit of risk. Comerica is currently generating about 0.02 per unit of risk. If you would invest  43,600  in Bank of Utica on October 10, 2024 and sell it today you would earn a total of  10,500  from holding Bank of Utica or generate 24.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	77.98%
Values	Daily Returns

Bank of Utica  vs.  Comerica

Bank of Utica

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Utica are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Bank of Utica unveiled solid returns over the last few months and may actually be approaching a breakup point.

Comerica

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Comerica are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting primary indicators, Comerica may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bank of Utica and Comerica

The main advantage of trading using opposite Bank of Utica and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Utica 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 Bank of Utica 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.