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 Corp 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
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MTZ and Regions is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank Corp 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 Corp 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
Assuming the 90 days horizon MT Bank Corp is expected to under-perform the Regions Financial. But the stock apears to be less risky and, when comparing its historical volatility, MT Bank Corp is 1.43 times less risky than Regions Financial. The stock trades about -0.69 of its potential returns per unit of risk. The Regions Financial is currently generating about -0.38 of returns per unit of risk over similar time horizon. If you would invest 2,516 in Regions Financial on September 23, 2024 and sell it today you would lose (296.00) from holding Regions Financial or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MT Bank Corp vs. Regions Financial
Performance |
| Timeline |
| MT Bank Corp |
| 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. The PNC Financial | MT Bank vs. Huntington Bancshares Incorporated | MT Bank vs. Regions Financial | MT Bank vs. Citizens Financial Group |
| Regions Financial vs. The PNC Financial | Regions Financial vs. MT Bank Corp | Regions Financial vs. Huntington Bancshares Incorporated | Regions Financial vs. Citizens Financial Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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