Correlation Between Triumph Financial and Comerica

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

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

Diversification Opportunities for Triumph Financial and Comerica

0.64

Correlation Coefficient

Triumph Financial  Comerica

Poor diversification

The 3 months correlation between Triumph and Comerica is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Triumph Financial and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica and Triumph Financial 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 Triumph Financial 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 Triumph Financial i.e., Triumph Financial and Comerica go up and down completely randomly.

Pair Corralation between Triumph Financial and Comerica

Assuming the 90 days horizon Triumph Financial is expected to under-perform the Comerica. But the stock apears to be less risky and, when comparing its historical volatility, Triumph Financial is 1.8 times less risky than Comerica. The stock trades about -0.08 of its potential returns per unit of risk. The Comerica is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  6,068  in Comerica on December 29, 2024 and sell it today you would lose (196.00) from holding Comerica or give up 3.23% of portfolio value over 90 days.

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

Triumph Financial  vs.  Comerica

Triumph Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Triumph Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Triumph Financial is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail 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 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.

Pair Trading with Triumph Financial and Comerica

The main advantage of trading using opposite Triumph Financial and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triumph Financial 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 Triumph Financial 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.