Correlation Between Comerica and JPMorgan Chase

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Can any of the company-specific risk be diversified away by investing in both Comerica and JPMorgan Chase 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 JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and JPMorgan Chase Co, you can compare the effects of market volatilities on Comerica and JPMorgan Chase 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 JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and JPMorgan Chase.

Diversification Opportunities for Comerica and JPMorgan Chase

0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between Comerica and JPMorgan is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase 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 JPMorgan Chase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Chase has no effect on the direction of Comerica i.e., Comerica and JPMorgan Chase go up and down completely randomly.

Pair Corralation between Comerica and JPMorgan Chase

Considering the 90-day investment horizon Comerica is expected to generate 1.68 times more return on investment than JPMorgan Chase. However, Comerica is 1.68 times more volatile than JPMorgan Chase Co. It trades about 0.2 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.28 per unit of risk. If you would invest  6,636  in Comerica on October 28, 2022 and sell it today you would earn a total of  567.00  from holding Comerica or generate 8.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Comerica  vs.  JPMorgan Chase Co

 Performance (%) 
       Timeline  
Comerica 
Comerica Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Comerica are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Comerica is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Comerica Price Channel

JPMorgan Chase 
JPMorgan Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, JPMorgan Chase may actually be approaching a critical reversion point that can send shares even higher in February 2023.

JPMorgan Price Channel

Comerica and JPMorgan Chase Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Comerica and JPMorgan Chase

The main advantage of trading using opposite Comerica and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica position performs unexpectedly, JPMorgan Chase 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 JPMorgan Chase will offset losses from the drop in JPMorgan Chase's long position.
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The idea behind Comerica and JPMorgan Chase Co 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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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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