Correlation Between Regions Financial and Bar Harbor
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Bar Harbor 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 Bar Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Bar Harbor Bankshares, you can compare the effects of market volatilities on Regions Financial and Bar Harbor 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 Bar Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Bar Harbor.
Diversification Opportunities for Regions Financial and Bar Harbor
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regions and Bar is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Bar Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bar Harbor Bankshares 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 Bar Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bar Harbor Bankshares has no effect on the direction of Regions Financial i.e., Regions Financial and Bar Harbor go up and down completely randomly.
Pair Corralation between Regions Financial and Bar Harbor
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.68 times more return on investment than Bar Harbor. However, Regions Financial is 1.48 times less risky than Bar Harbor. It trades about 0.24 of its potential returns per unit of risk. Bar Harbor Bankshares is currently generating about 0.16 per unit of risk. If you would invest 2,387 in Regions Financial on September 1, 2024 and sell it today you would earn a total of 339.00 from holding Regions Financial or generate 14.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. Bar Harbor Bankshares
Performance |
| Timeline |
| Regions Financial |
| Bar Harbor Bankshares |
Regions Financial and Bar Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Bar Harbor
The main advantage of trading using opposite Regions Financial and Bar Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Bar Harbor 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 Bar Harbor will offset losses from the drop in Bar Harbor's long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| Bar Harbor vs. Camden National | Bar Harbor vs. Bank of Marin | Bar Harbor vs. Arrow Financial | Bar Harbor vs. Auburn National Bancorporation |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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