Correlation Between Regions Financial and Burke Herbert
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Burke Herbert 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 Burke Herbert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Burke Herbert Financial, you can compare the effects of market volatilities on Regions Financial and Burke Herbert 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 Burke Herbert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Burke Herbert.
Diversification Opportunities for Regions Financial and Burke Herbert
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Regions and Burke is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Burke Herbert Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burke Herbert Financial 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 Burke Herbert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burke Herbert Financial has no effect on the direction of Regions Financial i.e., Regions Financial and Burke Herbert go up and down completely randomly.
Pair Corralation between Regions Financial and Burke Herbert
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.64 times more return on investment than Burke Herbert. However, Regions Financial is 1.57 times less risky than Burke Herbert. It trades about 0.1 of its potential returns per unit of risk. Burke Herbert Financial is currently generating about 0.03 per unit of risk. If you would invest 1,869 in Regions Financial on August 25, 2024 and sell it today you would earn a total of 805.00 from holding Regions Financial or generate 43.07% 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. Burke Herbert Financial
Performance |
| Timeline |
| Regions Financial |
| Burke Herbert Financial |
Regions Financial and Burke Herbert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Burke Herbert
The main advantage of trading using opposite Regions Financial and Burke Herbert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Burke Herbert 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 Burke Herbert will offset losses from the drop in Burke Herbert's long position.| Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated | Regions Financial vs. PNC Financial Services |
| Burke Herbert vs. Private Bancorp of | Burke Herbert vs. Avidbank Holdings | Burke Herbert vs. American Business Bk | Burke Herbert vs. Home Federal Bancorp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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