Correlation Between Comerica and Coeur DAlene

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

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

Diversification Opportunities for Comerica and Coeur DAlene

0.12

Correlation Coefficient

Comerica  Coeur DAlene

Average diversification

The 3 months correlation between Comerica and Coeur is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Coeur dAlene Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur dAlene Bancorp 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 Coeur DAlene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coeur dAlene Bancorp has no effect on the direction of Comerica i.e., Comerica and Coeur DAlene go up and down completely randomly.

Pair Corralation between Comerica and Coeur DAlene

Considering the 90-day investment horizon Comerica is expected to under-perform the Coeur DAlene. But the stock apears to be less risky and, when comparing its historical volatility, Comerica is 2.24 times less risky than Coeur DAlene. The stock trades about -0.02 of its potential returns per unit of risk. The Coeur dAlene Bancorp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,661  in Coeur dAlene Bancorp on December 28, 2024 and sell it today you would earn a total of  209.00  from holding Coeur dAlene Bancorp or generate 12.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	72.13%
Values	Daily Returns

Comerica  vs.  Coeur dAlene Bancorp

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.

Coeur dAlene Bancorp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Coeur dAlene Bancorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Coeur DAlene sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Comerica and Coeur DAlene

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

The idea behind Comerica and Coeur dAlene Bancorp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.