Correlation Between Regions Financial and Bank of Ireland
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Bank of Ireland 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 Bank of Ireland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial Corp and Bank of Ireland, you can compare the effects of market volatilities on Regions Financial and Bank of Ireland 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 Bank of Ireland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Bank of Ireland.
Diversification Opportunities for Regions Financial and Bank of Ireland
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Regions and Bank is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial Corp and Bank of Ireland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Ireland 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 Corp are associated (or correlated) with Bank of Ireland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Ireland has no effect on the direction of Regions Financial i.e., Regions Financial and Bank of Ireland go up and down completely randomly.
Pair Corralation between Regions Financial and Bank of Ireland
Assuming the 90 days trading horizon Regions Financial Corp is expected to generate 1.05 times more return on investment than Bank of Ireland. However, Regions Financial is 1.05 times more volatile than Bank of Ireland. It trades about 0.31 of its potential returns per unit of risk. Bank of Ireland is currently generating about -0.11 per unit of risk. If you would invest 2,363 in Regions Financial Corp on September 2, 2024 and sell it today you would earn a total of 354.00 from holding Regions Financial Corp or generate 14.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial Corp vs. Bank of Ireland
Performance |
| Timeline |
| Regions Financial Corp |
| Bank of Ireland |
Regions Financial and Bank of Ireland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Bank of Ireland
The main advantage of trading using opposite Regions Financial and Bank of Ireland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Bank of Ireland 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 Bank of Ireland will offset losses from the drop in Bank of Ireland's long position.| Regions Financial vs. Uniper SE | Regions Financial vs. Mulberry Group PLC | Regions Financial vs. London Security Plc | Regions Financial vs. Triad Group PLC |
| Bank of Ireland vs. SupplyMe Capital PLC | Bank of Ireland vs. Lloyds Banking Group | Bank of Ireland vs. Premier African Minerals | Bank of Ireland vs. SANTANDER UK 8 |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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