Correlation Between Regions Financial and Hansa Trust
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Hansa Trust 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 Hansa Trust 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 Hansa Trust, you can compare the effects of market volatilities on Regions Financial and Hansa Trust 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 Hansa Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Hansa Trust.
Diversification Opportunities for Regions Financial and Hansa Trust
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Regions and Hansa is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial Corp and Hansa Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansa Trust 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 Hansa Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansa Trust has no effect on the direction of Regions Financial i.e., Regions Financial and Hansa Trust go up and down completely randomly.
Pair Corralation between Regions Financial and Hansa Trust
Assuming the 90 days trading horizon Regions Financial Corp is expected to generate 2.32 times more return on investment than Hansa Trust. However, Regions Financial is 2.32 times more volatile than Hansa Trust. It trades about 0.25 of its potential returns per unit of risk. Hansa Trust is currently generating about -0.21 per unit of risk. If you would invest 2,325 in Regions Financial Corp on September 5, 2024 and sell it today you would earn a total of 287.00 from holding Regions Financial Corp or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Regions Financial Corp vs. Hansa Trust
Performance |
| Timeline |
| Regions Financial Corp |
| Hansa Trust |
Regions Financial and Hansa Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Hansa Trust
The main advantage of trading using opposite Regions Financial and Hansa Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Hansa Trust 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 Hansa Trust will offset losses from the drop in Hansa Trust's long position.| Regions Financial vs. Cars Inc | Regions Financial vs. Pentair PLC | Regions Financial vs. MTI Wireless Edge | Regions Financial vs. Porvair plc |
| Hansa Trust vs. Regions Financial Corp | Hansa Trust vs. Extra Space Storage | Hansa Trust vs. National Bank of | Hansa Trust vs. Datagroup SE |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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