Correlation Between Regions Financial and Ihuman
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Ihuman 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 Ihuman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Ihuman Inc, you can compare the effects of market volatilities on Regions Financial and Ihuman 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 Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Ihuman.
Diversification Opportunities for Regions Financial and Ihuman
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Regions and Ihuman is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc 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 Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of Regions Financial i.e., Regions Financial and Ihuman go up and down completely randomly.
Pair Corralation between Regions Financial and Ihuman
Assuming the 90 days horizon Regions Financial is expected to generate 0.13 times more return on investment than Ihuman. However, Regions Financial is 7.8 times less risky than Ihuman. It trades about 0.15 of its potential returns per unit of risk. Ihuman Inc is currently generating about -0.03 per unit of risk. If you would invest 2,483 in Regions Financial on September 2, 2024 and sell it today you would earn a total of 157.00 from holding Regions Financial or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 37.9% |
| Values | Daily Returns |
Regions Financial vs. Ihuman Inc
Performance |
| Timeline |
| Regions Financial |
| Ihuman Inc |
Regions Financial and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Ihuman
The main advantage of trading using opposite Regions Financial and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Ihuman 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 Ihuman will offset losses from the drop in Ihuman's long position.| Regions Financial vs. Western Union Co | Regions Financial vs. Pintec Technology Holdings | Regions Financial vs. Encore Capital Group | Regions Financial vs. Pinterest |
| Ihuman vs. Wah Fu Education | Ihuman vs. Golden Sun Education | Ihuman vs. Elite Education Group | Ihuman vs. American Public 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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