Correlation Between Halfords Group and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Halfords Group 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 Halfords Group and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Halfords Group PLC and Regions Financial Corp, you can compare the effects of market volatilities on Halfords Group 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 Halfords Group with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Halfords Group and Regions Financial.
Diversification Opportunities for Halfords Group and Regions Financial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Halfords and Regions is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Halfords Group PLC 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 Halfords Group 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 Halfords Group PLC 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 Halfords Group i.e., Halfords Group and Regions Financial go up and down completely randomly.
Pair Corralation between Halfords Group and Regions Financial
Assuming the 90 days trading horizon Halfords Group is expected to generate 8.3 times less return on investment than Regions Financial. In addition to that, Halfords Group is 1.51 times more volatile than Regions Financial Corp. It trades about 0.01 of its total potential returns per unit of risk. Regions Financial Corp is currently generating about 0.18 per unit of volatility. If you would invest 1,839 in Regions Financial Corp on September 3, 2024 and sell it today you would earn a total of 827.00 from holding Regions Financial Corp or generate 44.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Halfords Group PLC vs. Regions Financial Corp
Performance |
| Timeline |
| Halfords Group PLC |
| Regions Financial Corp |
Halfords Group and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Halfords Group and Regions Financial
The main advantage of trading using opposite Halfords Group and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Halfords Group 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.| Halfords Group vs. Alliance Data Systems | Halfords Group vs. Wizz Air Holdings | Halfords Group vs. Datalogic | Halfords Group vs. Extra Space Storage |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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