Correlation Between Regions Financial and Sierra Bancorp
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Sierra 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 Sierra 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 Sierra Bancorp, you can compare the effects of market volatilities on Regions Financial and Sierra 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 Sierra Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Sierra Bancorp.
Diversification Opportunities for Regions Financial and Sierra Bancorp
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Regions and Sierra is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Sierra Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra 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 Sierra Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Bancorp has no effect on the direction of Regions Financial i.e., Regions Financial and Sierra Bancorp go up and down completely randomly.
Pair Corralation between Regions Financial and Sierra Bancorp
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.58 times more return on investment than Sierra Bancorp. However, Regions Financial is 1.72 times less risky than Sierra Bancorp. It trades about 0.23 of its potential returns per unit of risk. Sierra Bancorp is currently generating about 0.13 per unit of risk. If you would invest 2,406 in Regions Financial on August 27, 2024 and sell it today you would earn a total of 322.00 from holding Regions Financial or generate 13.38% 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. Sierra Bancorp
Performance |
| Timeline |
| Regions Financial |
| Sierra Bancorp |
Regions Financial and Sierra Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Sierra Bancorp
The main advantage of trading using opposite Regions Financial and Sierra Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Sierra 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 Sierra Bancorp will offset losses from the drop in Sierra Bancorp's long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| Sierra Bancorp vs. Home Federal Bancorp | Sierra Bancorp vs. First Financial Northwest | Sierra Bancorp vs. First Northwest Bancorp | Sierra Bancorp vs. First Capital |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |