Correlation Between Regions Financial and Citizens Holding
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Citizens Holding 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 Citizens Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Citizens Holding, you can compare the effects of market volatilities on Regions Financial and Citizens Holding 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 Citizens Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Citizens Holding.
Diversification Opportunities for Regions Financial and Citizens Holding
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Regions and Citizens is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Citizens Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Holding 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 Citizens Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Holding has no effect on the direction of Regions Financial i.e., Regions Financial and Citizens Holding go up and down completely randomly.
Pair Corralation between Regions Financial and Citizens Holding
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.86 times more return on investment than Citizens Holding. However, Regions Financial is 1.16 times less risky than Citizens Holding. It trades about 0.04 of its potential returns per unit of risk. Citizens Holding is currently generating about -0.02 per unit of risk. If you would invest 1,984 in Regions Financial on August 28, 2024 and sell it today you would earn a total of 763.00 from holding Regions Financial or generate 38.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.72% |
| Values | Daily Returns |
Regions Financial vs. Citizens Holding
Performance |
| Timeline |
| Regions Financial |
| Citizens Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Regions Financial and Citizens Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Citizens Holding
The main advantage of trading using opposite Regions Financial and Citizens Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Citizens Holding 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 Citizens Holding will offset losses from the drop in Citizens Holding's long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| Citizens Holding vs. Home Federal Bancorp | Citizens Holding vs. Lake Shore Bancorp | Citizens Holding vs. Community West Bancshares | Citizens Holding vs. Magyar 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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