Correlation Between Commercial Vehicle and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle 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 Commercial Vehicle and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Vehicle Group and Regions Financial, you can compare the effects of market volatilities on Commercial Vehicle 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 Commercial Vehicle with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and Regions Financial.
Diversification Opportunities for Commercial Vehicle and Regions Financial
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commercial and Regions is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and Commercial Vehicle 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 Commercial Vehicle 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 has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and Regions Financial go up and down completely randomly.
Pair Corralation between Commercial Vehicle and Regions Financial
Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the Regions Financial. In addition to that, Commercial Vehicle is 1.36 times more volatile than Regions Financial. It trades about -0.2 of its total potential returns per unit of risk. Regions Financial is currently generating about 0.25 per unit of volatility. If you would invest 2,240 in Regions Financial on September 1, 2024 and sell it today you would earn a total of 340.00 from holding Regions Financial or generate 15.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial Vehicle Group vs. Regions Financial
Performance |
| Timeline |
| Commercial Vehicle |
| Regions Financial |
Commercial Vehicle and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and Regions Financial
The main advantage of trading using opposite Commercial Vehicle and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle 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.| Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc |
| Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Superior Plus Corp | Regions Financial vs. Origin Agritech | Regions Financial vs. Identiv |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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