Correlation Between Comerica and Bank Utica

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

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

Diversification Opportunities for Comerica and Bank Utica

-0.08

Correlation Coefficient

Comerica  Bank Utica

Good diversification

The 3 months correlation between Comerica and Bank is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Bank Utica Ny in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Utica Ny 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 Bank Utica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Utica Ny has no effect on the direction of Comerica i.e., Comerica and Bank Utica go up and down completely randomly.

Pair Corralation between Comerica and Bank Utica

Considering the 90-day investment horizon Comerica is expected to generate 1.14 times more return on investment than Bank Utica. However, Comerica is 1.14 times more volatile than Bank Utica Ny. It trades about -0.02 of its potential returns per unit of risk. Bank Utica Ny is currently generating about -0.05 per unit of risk. If you would invest  6,068  in Comerica on December 28, 2024 and sell it today you would lose (225.00) from holding Comerica or give up 3.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Comerica  vs.  Bank Utica Ny

Comerica

Risk-Adjusted Performance

Very Weak

Over the last 90 days Comerica has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Comerica is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Bank Utica Ny

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Utica Ny has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Bank Utica is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Comerica and Bank Utica

The main advantage of trading using opposite Comerica and Bank Utica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, Bank Utica 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 Bank Utica will offset losses from the drop in Bank Utica's long position.

The idea behind Comerica and Bank Utica Ny 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..