Correlation Between Regions Financial and Wintrust Financial
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Wintrust 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 Regions Financial and Wintrust Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Wintrust Financial Corp, you can compare the effects of market volatilities on Regions Financial and Wintrust 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 Regions Financial with a short position of Wintrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Wintrust Financial.
Diversification Opportunities for Regions Financial and Wintrust Financial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Regions and Wintrust is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Wintrust Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintrust Financial Corp and Regions Financial 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 Regions Financial are associated (or correlated) with Wintrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintrust Financial Corp has no effect on the direction of Regions Financial i.e., Regions Financial and Wintrust Financial go up and down completely randomly.
Pair Corralation between Regions Financial and Wintrust Financial
Assuming the 90 days horizon Regions Financial is expected to generate 1.27 times more return on investment than Wintrust Financial. However, Regions Financial is 1.27 times more volatile than Wintrust Financial Corp. It trades about 0.04 of its potential returns per unit of risk. Wintrust Financial Corp is currently generating about 0.03 per unit of risk. If you would invest 2,012 in Regions Financial on August 30, 2024 and sell it today you would earn a total of 460.00 from holding Regions Financial or generate 22.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. Wintrust Financial Corp
Performance |
| Timeline |
| Regions Financial |
| Wintrust Financial Corp |
Regions Financial and Wintrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Wintrust Financial
The main advantage of trading using opposite Regions Financial and Wintrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Wintrust 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 Wintrust Financial will offset losses from the drop in Wintrust Financial's long position.| Regions Financial vs. KeyCorp | Regions Financial vs. KeyCorp | Regions Financial vs. KeyCorp | Regions Financial vs. Regions Financial |
| Wintrust Financial vs. Wintrust Financial Corp | Wintrust Financial vs. WesBanco | Wintrust Financial vs. Heartland Financial USA | Wintrust Financial vs. Pinnacle Financial Partners |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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