Correlation Between Regions Financial and CF Financial
Can any of the company-specific risk be diversified away by investing in both Regions Financial and CF Financial 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 Financial 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 Financial, you can compare the effects of market volatilities on Regions Financial and CF Financial 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 Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and CF Financial.
Diversification Opportunities for Regions Financial and CF Financial
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regions and CFFI is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and CF Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF 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 CF Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Financial has no effect on the direction of Regions Financial i.e., Regions Financial and CF Financial go up and down completely randomly.
Pair Corralation between Regions Financial and CF Financial
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.75 times more return on investment than CF Financial. However, Regions Financial is 1.33 times less risky than CF Financial. It trades about 0.07 of its potential returns per unit of risk. CF Financial is currently generating about 0.04 per unit of risk. If you would invest 1,733 in Regions Financial on September 1, 2024 and sell it today you would earn a total of 993.00 from holding Regions Financial or generate 57.3% 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. CF Financial
Performance |
| Timeline |
| Regions Financial |
| CF Financial |
Regions Financial and CF Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and CF Financial
The main advantage of trading using opposite Regions Financial and CF Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, CF Financial 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 Financial will offset losses from the drop in CF Financial's long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| CF Financial vs. Home Federal Bancorp | CF Financial vs. First Financial Northwest | CF Financial vs. First Northwest Bancorp | CF Financial 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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