Correlation Between Maiden Holdings and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Maiden Holdings 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 Maiden Holdings and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maiden Holdings and Regions Financial, you can compare the effects of market volatilities on Maiden Holdings 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 Maiden Holdings with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maiden Holdings and Regions Financial.
Diversification Opportunities for Maiden Holdings and Regions Financial
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maiden and Regions is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and Maiden Holdings 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 Maiden Holdings 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 Maiden Holdings i.e., Maiden Holdings and Regions Financial go up and down completely randomly.
Pair Corralation between Maiden Holdings and Regions Financial
Given the investment horizon of 90 days Maiden Holdings is expected to generate 3.35 times less return on investment than Regions Financial. In addition to that, Maiden Holdings is 1.45 times more volatile than Regions Financial. It trades about 0.02 of its total potential returns per unit of risk. Regions Financial is currently generating about 0.09 per unit of volatility. If you would invest 1,570 in Regions Financial on September 2, 2024 and sell it today you would earn a total of 428.00 from holding Regions Financial or generate 27.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.98% |
| Values | Daily Returns |
Maiden Holdings vs. Regions Financial
Performance |
| Timeline |
| Maiden Holdings |
| Regions Financial |
Maiden Holdings and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maiden Holdings and Regions Financial
The main advantage of trading using opposite Maiden Holdings and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maiden Holdings 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.| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
| Regions Financial vs. Ihuman Inc | Regions Financial vs. Pinterest | Regions Financial vs. Universal Technical Institute | Regions Financial vs. Four Seasons Education |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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