Correlation Between Regions Financial and US Bancorp
Can any of the company-specific risk be diversified away by investing in both Regions Financial and US Bancorp 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 US Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and US Bancorp, you can compare the effects of market volatilities on Regions Financial and US Bancorp 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 US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and US Bancorp.
Diversification Opportunities for Regions Financial and US Bancorp
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Regions and USB-PH is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp 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 US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp has no effect on the direction of Regions Financial i.e., Regions Financial and US Bancorp go up and down completely randomly.
Pair Corralation between Regions Financial and US Bancorp
Assuming the 90 days horizon Regions Financial is expected to generate 1.82 times more return on investment than US Bancorp. However, Regions Financial is 1.82 times more volatile than US Bancorp. It trades about 0.11 of its potential returns per unit of risk. US Bancorp is currently generating about 0.1 per unit of risk. If you would invest 1,709 in Regions Financial on August 24, 2024 and sell it today you would earn a total of 226.00 from holding Regions Financial or generate 13.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. US Bancorp
Performance |
| Timeline |
| Regions Financial |
| US Bancorp |
Regions Financial and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and US Bancorp
The main advantage of trading using opposite Regions Financial and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, US Bancorp 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 US Bancorp will offset losses from the drop in US Bancorp's long position.| Regions Financial vs. Truist Financial | Regions Financial vs. US Bancorp | Regions Financial vs. Truist Financial | Regions Financial vs. MetLife Preferred Stock |
| US Bancorp vs. Capital One Financial | US Bancorp vs. Capital One Financial | US Bancorp vs. Bank of America | US Bancorp vs. KeyCorp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |