Correlation Between Bell Food and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Bell Food and Regions Financial 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 Bell Food and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell Food Group and Regions Financial Corp, you can compare the effects of market volatilities on Bell Food and Regions Financial 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 Bell Food with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Food and Regions Financial.
Diversification Opportunities for Bell Food and Regions Financial
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bell and Regions is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bell Food Group and Regions Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial Corp and Bell Food 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 Bell Food Group are associated (or correlated) with Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial Corp has no effect on the direction of Bell Food i.e., Bell Food and Regions Financial go up and down completely randomly.
Pair Corralation between Bell Food and Regions Financial
Assuming the 90 days trading horizon Bell Food Group is expected to under-perform the Regions Financial. But the stock apears to be less risky and, when comparing its historical volatility, Bell Food Group is 1.85 times less risky than Regions Financial. The stock trades about -0.02 of its potential returns per unit of risk. The Regions Financial Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,694 in Regions Financial Corp on December 13, 2024 and sell it today you would earn a total of 408.00 from holding Regions Financial Corp or generate 24.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.66% |
| Values | Daily Returns |
Bell Food Group vs. Regions Financial Corp
Performance |
| Timeline |
| Bell Food Group |
| Regions Financial Corp |
Bell Food and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Food and Regions Financial
The main advantage of trading using opposite Bell Food and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Food position performs unexpectedly, Regions Financial 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 Regions Financial will offset losses from the drop in Regions Financial's long position.| Bell Food vs. United Utilities Group | ||
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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