Correlation Between ESSA Bancorp and Regions Financial
Can any of the company-specific risk be diversified away by investing in both ESSA Bancorp 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 ESSA Bancorp and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESSA Bancorp and Regions Financial, you can compare the effects of market volatilities on ESSA Bancorp 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 ESSA Bancorp with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESSA Bancorp and Regions Financial.
Diversification Opportunities for ESSA Bancorp and Regions Financial
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ESSA and Regions is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ESSA Bancorp and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and ESSA Bancorp 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 ESSA Bancorp 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 ESSA Bancorp i.e., ESSA Bancorp and Regions Financial go up and down completely randomly.
Pair Corralation between ESSA Bancorp and Regions Financial
If you would invest 1,927 in ESSA Bancorp on August 31, 2024 and sell it today you would earn a total of 121.00 from holding ESSA Bancorp or generate 6.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESSA Bancorp vs. Regions Financial
Performance |
| Timeline |
| ESSA Bancorp |
| Regions Financial |
ESSA Bancorp and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESSA Bancorp and Regions Financial
The main advantage of trading using opposite ESSA Bancorp and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESSA Bancorp 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.| ESSA Bancorp vs. Community West Bancshares | ESSA Bancorp vs. First Northwest Bancorp | ESSA Bancorp vs. First Community | ESSA Bancorp vs. Oak Valley Bancorp |
| Regions Financial vs. KeyCorp | Regions Financial vs. US Bancorp | Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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