Correlation Between Regions Financial and First Community
Can any of the company-specific risk be diversified away by investing in both Regions Financial and First Community 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 First Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and First Community Bancshares, you can compare the effects of market volatilities on Regions Financial and First Community 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 First Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and First Community.
Diversification Opportunities for Regions Financial and First Community
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Regions and First is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and First Community Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community Banc 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 First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community Banc has no effect on the direction of Regions Financial i.e., Regions Financial and First Community go up and down completely randomly.
Pair Corralation between Regions Financial and First Community
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.69 times more return on investment than First Community. However, Regions Financial is 1.44 times less risky than First Community. It trades about 0.18 of its potential returns per unit of risk. First Community Bancshares is currently generating about 0.08 per unit of risk. If you would invest 2,333 in Regions Financial on August 30, 2024 and sell it today you would earn a total of 392.00 from holding Regions Financial or generate 16.8% 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. First Community Bancshares
Performance |
| Timeline |
| Regions Financial |
| First Community Banc |
Regions Financial and First Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and First Community
The main advantage of trading using opposite Regions Financial and First Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, First Community 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 First Community will offset losses from the drop in First Community's long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| First Community vs. Dana Inc | First Community vs. Jutal Offshore Oil | First Community vs. SBM Offshore NV | First Community vs. Marine Products |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |