Correlation Between MT Bank and Regions Financial
Can any of the company-specific risk be diversified away by investing in both MT Bank 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 MT Bank and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MT Bank and Regions Financial, you can compare the effects of market volatilities on MT Bank 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 MT Bank with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MT Bank and Regions Financial.
Diversification Opportunities for MT Bank and Regions Financial
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MTB and Regions is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and MT Bank 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 MT Bank 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 MT Bank i.e., MT Bank and Regions Financial go up and down completely randomly.
Pair Corralation between MT Bank and Regions Financial
Considering the 90-day investment horizon MT Bank is expected to generate 1.1 times less return on investment than Regions Financial. In addition to that, MT Bank is 1.08 times more volatile than Regions Financial. It trades about 0.18 of its total potential returns per unit of risk. Regions Financial is currently generating about 0.21 per unit of volatility. If you would invest 2,364 in Regions Financial on August 23, 2024 and sell it today you would earn a total of 310.00 from holding Regions Financial or generate 13.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MT Bank vs. Regions Financial
Performance |
| Timeline |
| MT Bank |
| Regions Financial |
MT Bank and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MT Bank and Regions Financial
The main advantage of trading using opposite MT Bank and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT Bank 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.| MT Bank vs. US Bancorp | MT Bank vs. Truist Financial Corp | MT Bank vs. Fifth Third Bancorp | MT Bank vs. KeyCorp |
| Regions Financial vs. Waterstone Financial | Regions Financial vs. Mid Penn Bancorp | Regions Financial vs. ST Bancorp | Regions Financial vs. Republic 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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