Correlation Between Empresa Distribuidora and Regions Financial

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Can any of the company-specific risk be diversified away by investing in both Empresa Distribuidora 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 Empresa Distribuidora and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empresa Distribuidora y and Regions Financial, you can compare the effects of market volatilities on Empresa Distribuidora 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 Empresa Distribuidora with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empresa Distribuidora and Regions Financial.

Diversification Opportunities for Empresa Distribuidora and Regions Financial

EmpresaRegionsDiversified AwayEmpresaRegionsDiversified Away100%
-0.06
  Correlation Coefficient

Good diversification

The 3 months correlation between Empresa and Regions is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Empresa Distribuidora y and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and Empresa Distribuidora 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 Empresa Distribuidora y 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 Empresa Distribuidora i.e., Empresa Distribuidora and Regions Financial go up and down completely randomly.

Pair Corralation between Empresa Distribuidora and Regions Financial

Considering the 90-day investment horizon Empresa Distribuidora y is expected to generate 3.43 times more return on investment than Regions Financial. However, Empresa Distribuidora is 3.43 times more volatile than Regions Financial. It trades about 0.16 of its potential returns per unit of risk. Regions Financial is currently generating about -0.14 per unit of risk. If you would invest  3,608  in Empresa Distribuidora y on November 20, 2024 and sell it today you would earn a total of  337.00  from holding Empresa Distribuidora y or generate 9.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Empresa Distribuidora y  vs.  Regions Financial

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 01020304050
JavaScript chart by amCharts 3.21.15EDN RF-PE
       Timeline  
Empresa Distribuidora 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Empresa Distribuidora y are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Empresa Distribuidora may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb35404550
Regions Financial 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Regions Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Regions Financial is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1717.51818.51919.5

Empresa Distribuidora and Regions Financial Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-13.09-9.81-6.52-3.230.03.346.810.2513.7117.16 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.15EDN RF-PE
       Returns  

Pair Trading with Empresa Distribuidora and Regions Financial

The main advantage of trading using opposite Empresa Distribuidora and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empresa Distribuidora 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.
The idea behind Empresa Distribuidora y and Regions Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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