Correlation Between Regions Financial and OAKTRSPECLENDNEW
Can any of the company-specific risk be diversified away by investing in both Regions Financial and OAKTRSPECLENDNEW 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 Regions Financial and OAKTRSPECLENDNEW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and OAKTRSPECLENDNEW, you can compare the effects of market volatilities on Regions Financial and OAKTRSPECLENDNEW 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 Regions Financial with a short position of OAKTRSPECLENDNEW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and OAKTRSPECLENDNEW.
Diversification Opportunities for Regions Financial and OAKTRSPECLENDNEW
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Regions and OAKTRSPECLENDNEW is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and OAKTRSPECLENDNEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKTRSPECLENDNEW and Regions 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 Regions Financial are associated (or correlated) with OAKTRSPECLENDNEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKTRSPECLENDNEW has no effect on the direction of Regions Financial i.e., Regions Financial and OAKTRSPECLENDNEW go up and down completely randomly.
Pair Corralation between Regions Financial and OAKTRSPECLENDNEW
Assuming the 90 days horizon Regions Financial is expected to generate 1.36 times more return on investment than OAKTRSPECLENDNEW. However, Regions Financial is 1.36 times more volatile than OAKTRSPECLENDNEW. It trades about 0.07 of its potential returns per unit of risk. OAKTRSPECLENDNEW is currently generating about 0.06 per unit of risk. If you would invest 2,040 in Regions Financial on September 24, 2024 and sell it today you would earn a total of 180.00 from holding Regions Financial or generate 8.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Regions Financial vs. OAKTRSPECLENDNEW
Performance |
Timeline |
Regions Financial |
OAKTRSPECLENDNEW |
Regions Financial and OAKTRSPECLENDNEW Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Regions Financial and OAKTRSPECLENDNEW
The main advantage of trading using opposite Regions Financial and OAKTRSPECLENDNEW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW will offset losses from the drop in OAKTRSPECLENDNEW's long position.Regions Financial vs. The PNC Financial | Regions Financial vs. MT Bank Corp | Regions Financial vs. Huntington Bancshares Incorporated | Regions Financial vs. Citizens Financial Group |
OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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