Correlation Between Sterling Bancorp and Comerica

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

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

Diversification Opportunities for Sterling Bancorp and Comerica

-0.07

Correlation Coefficient

Sterling Bancorp  Comerica

Good diversification

The 3 months correlation between Sterling and Comerica is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Bancorp and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and Sterling Bancorp 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 Sterling Bancorp 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 Sterling Bancorp i.e., Sterling Bancorp and Comerica go up and down completely randomly.

Pair Corralation between Sterling Bancorp and Comerica

Considering the 90-day investment horizon Sterling Bancorp is expected to generate 0.55 times more return on investment than Comerica. However, Sterling Bancorp is 1.8 times less risky than Comerica. It trades about -0.06 of its potential returns per unit of risk. Comerica is currently generating about -0.13 per unit of risk. If you would invest  482.00  in Sterling Bancorp on December 4, 2024 and sell it today you would lose (20.00) from holding Sterling Bancorp or give up 4.15% of portfolio value over 90 days.

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

Sterling Bancorp  vs.  Comerica

Sterling Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sterling Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Sterling Bancorp is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 conflicting performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sterling Bancorp and Comerica

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

Check out your portfolio center.

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.