Correlation Between Regions Financial and Bank of East
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Bank of East 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 Bank of East into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Bank of East, you can compare the effects of market volatilities on Regions Financial and Bank of East 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 Bank of East. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Bank of East.
Diversification Opportunities for Regions Financial and Bank of East
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Regions and Bank is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Bank of East in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of East 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 Bank of East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of East has no effect on the direction of Regions Financial i.e., Regions Financial and Bank of East go up and down completely randomly.
Pair Corralation between Regions Financial and Bank of East
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 2.3 times more return on investment than Bank of East. However, Regions Financial is 2.3 times more volatile than Bank of East. It trades about 0.24 of its potential returns per unit of risk. Bank of East is currently generating about -0.19 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. Bank of East
Performance |
| Timeline |
| Regions Financial |
| Bank of East |
Regions Financial and Bank of East Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Bank of East
The main advantage of trading using opposite Regions Financial and Bank of East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Bank of East 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 Bank of East will offset losses from the drop in Bank of East's long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| Bank of East vs. Bank Mandiri Persero | Bank of East vs. Piraeus Bank SA | Bank of East vs. Kasikornbank Public Co | Bank of East vs. Turkiye Garanti Bankasi |
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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