Correlation Between Commercial International and Zions Bancorporation

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

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

Diversification Opportunities for Commercial International and Zions Bancorporation

0.53

Correlation Coefficient

Commercial International  Zions Bancorporation

Very weak diversification

The 3 months correlation between Commercial and Zions is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Commercial International Bank and Zions Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zions Bancorporation and Commercial International 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 Commercial International Bank are associated (or correlated) with Zions Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zions Bancorporation has no effect on the direction of Commercial International i.e., Commercial International and Zions Bancorporation go up and down completely randomly.

Pair Corralation between Commercial International and Zions Bancorporation

If you would invest  133.00  in Commercial International Bank on March 8, 2024 and sell it today you would earn a total of  0.00  from holding Commercial International Bank or generate 0.0% return on investment over 90 days.

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

Commercial International Bank  vs.  Zions Bancorp.

Commercial International

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Commercial International Bank are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Commercial International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Zions Bancorporation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zions Bancorporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Zions Bancorporation is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Commercial International and Zions Bancorporation

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

The idea behind Commercial International Bank and Zions Bancorporation 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.