Correlation Between Utilities Select and Comerica Incorporated

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

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

Diversification Opportunities for Utilities Select and Comerica Incorporated

0.81

Correlation Coefficient

Utilities Select  Comerica Incorporated

Very poor diversification

The 3 months correlation between Utilities and Comerica is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Utilities Select Sector and Comerica Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica Incorporated and Utilities Select 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 Utilities Select Sector are associated (or correlated) with Comerica Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comerica Incorporated has no effect on the direction of Utilities Select i.e., Utilities Select and Comerica Incorporated go up and down completely randomly.

Pair Corralation between Utilities Select and Comerica Incorporated

Considering the 90-day investment horizon Utilities Select is expected to generate 5.36 times less return on investment than Comerica Incorporated. But when comparing it to its historical volatility, Utilities Select Sector is 3.08 times less risky than Comerica Incorporated. It trades about 0.06 of its potential returns per unit of risk. Comerica Incorporated is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  6,671  in Comerica Incorporated on August 4, 2025 and sell it today you would earn a total of  979.00  from holding Comerica Incorporated or generate 14.68% return on investment over 90 days.

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

Utilities Select Sector  vs.  Comerica Incorporated

Utilities Select Sector

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Utilities Select Sector are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Utilities Select is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Comerica Incorporated

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Comerica Incorporated are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Comerica Incorporated sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Utilities Select and Comerica Incorporated

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

The idea behind Utilities Select Sector and Comerica Incorporated 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.