Correlation Between Regions Financial and First United
Can any of the company-specific risk be diversified away by investing in both Regions Financial and First United 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 United 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 United, you can compare the effects of market volatilities on Regions Financial and First United 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 United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and First United.
Diversification Opportunities for Regions Financial and First United
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regions and First is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and First United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First United 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 United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First United has no effect on the direction of Regions Financial i.e., Regions Financial and First United go up and down completely randomly.
Pair Corralation between Regions Financial and First United
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 1.54 times less return on investment than First United. In addition to that, Regions Financial is 1.1 times more volatile than First United. It trades about 0.17 of its total potential returns per unit of risk. First United is currently generating about 0.29 per unit of volatility. If you would invest 1,969 in First United on August 25, 2024 and sell it today you would earn a total of 1,528 from holding First United or generate 77.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Regions Financial vs. First United
Performance |
| Timeline |
| Regions Financial |
| First United |
Regions Financial and First United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and First United
The main advantage of trading using opposite Regions Financial and First United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, First United 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 United will offset losses from the drop in First United's long position.| Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated | Regions Financial vs. PNC Financial Services |
| First United vs. First Community | First United vs. Greene County Bancorp | First United vs. Community West Bancshares | First United vs. Affinity Bancshares |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |