Correlation Between CullenFrost Bankers and Regions Financial
Can any of the company-specific risk be diversified away by investing in both CullenFrost Bankers 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 CullenFrost Bankers and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CullenFrost Bankers and Regions Financial, you can compare the effects of market volatilities on CullenFrost Bankers 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 CullenFrost Bankers with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CullenFrost Bankers and Regions Financial.
Diversification Opportunities for CullenFrost Bankers and Regions Financial
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between CullenFrost and Regions is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding CullenFrost Bankers and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and CullenFrost Bankers 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 CullenFrost Bankers 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 has no effect on the direction of CullenFrost Bankers i.e., CullenFrost Bankers and Regions Financial go up and down completely randomly.
Pair Corralation between CullenFrost Bankers and Regions Financial
Assuming the 90 days trading horizon CullenFrost Bankers is expected to under-perform the Regions Financial. But the preferred stock apears to be less risky and, when comparing its historical volatility, CullenFrost Bankers is 1.4 times less risky than Regions Financial. The preferred stock trades about -0.36 of its potential returns per unit of risk. The Regions Financial is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 1,906 in Regions Financial on September 14, 2024 and sell it today you would lose (40.00) from holding Regions Financial or give up 2.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CullenFrost Bankers vs. Regions Financial
Performance |
| Timeline |
| CullenFrost Bankers |
| Regions Financial |
CullenFrost Bankers and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CullenFrost Bankers and Regions Financial
The main advantage of trading using opposite CullenFrost Bankers and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CullenFrost Bankers 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.| CullenFrost Bankers vs. Morgan Stanley | CullenFrost Bankers vs. KeyCorp | CullenFrost Bankers vs. KeyCorp | CullenFrost Bankers vs. KeyCorp |
| Regions Financial vs. Morgan Stanley | Regions Financial vs. KeyCorp | Regions Financial vs. KeyCorp | Regions Financial vs. KeyCorp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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