Correlation Between Comerica and Virginia National

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

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

Diversification Opportunities for Comerica and Virginia National

0.52

Correlation Coefficient

Comerica  Virginia National

Very weak diversification

The 3 months correlation between Comerica and Virginia is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and Virginia National Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virginia National 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 Virginia National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virginia National has no effect on the direction of Comerica i.e., Comerica and Virginia National go up and down completely randomly.

Pair Corralation between Comerica and Virginia National

Considering the 90-day investment horizon Comerica is expected to generate 0.93 times more return on investment than Virginia National. However, Comerica is 1.08 times less risky than Virginia National. It trades about -0.08 of its potential returns per unit of risk. Virginia National Bankshares is currently generating about -0.11 per unit of risk. If you would invest  7,004  in Comerica on December 3, 2024 and sell it today you would lose (621.00) from holding Comerica or give up 8.87% of portfolio value over 90 days.

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

Comerica  vs.  Virginia National Bankshares

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 latest conflicting performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Virginia National

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virginia National Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Comerica and Virginia National

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

The idea behind Comerica and Virginia National Bankshares 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.