Correlation Between Regions Financial and CF Bankshares
Can any of the company-specific risk be diversified away by investing in both Regions Financial and CF Bankshares 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 CF Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and CF Bankshares, you can compare the effects of market volatilities on Regions Financial and CF Bankshares 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 CF Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and CF Bankshares.
Diversification Opportunities for Regions Financial and CF Bankshares
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Regions and CFBK is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and CF Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF 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 CF Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Bankshares has no effect on the direction of Regions Financial i.e., Regions Financial and CF Bankshares go up and down completely randomly.
Pair Corralation between Regions Financial and CF Bankshares
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.98 times more return on investment than CF Bankshares. However, Regions Financial is 1.02 times less risky than CF Bankshares. It trades about 0.24 of its potential returns per unit of risk. CF Bankshares is currently generating about 0.18 per unit of risk. If you would invest 2,406 in Regions Financial on August 28, 2024 and sell it today you would earn a total of 341.00 from holding Regions Financial or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. CF Bankshares
Performance |
| Timeline |
| Regions Financial |
| CF Bankshares |
Regions Financial and CF Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and CF Bankshares
The main advantage of trading using opposite Regions Financial and CF Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, CF Bankshares 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 CF Bankshares will offset losses from the drop in CF Bankshares' long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| CF Bankshares vs. Magyar Bancorp | CF Bankshares vs. Home Federal Bancorp | CF Bankshares vs. Community West Bancshares | CF Bankshares vs. First Financial Northwest |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |