Correlation Between Regions Financial and Inter Co
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Inter Co 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 Inter Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Inter Co Class, you can compare the effects of market volatilities on Regions Financial and Inter Co 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 Inter Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Inter Co.
Diversification Opportunities for Regions Financial and Inter Co
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Regions and Inter is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Inter Co Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Co Class 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 Inter Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Co Class has no effect on the direction of Regions Financial i.e., Regions Financial and Inter Co go up and down completely randomly.
Pair Corralation between Regions Financial and Inter Co
Allowing for the 90-day total investment horizon Regions Financial is expected to under-perform the Inter Co. But the stock apears to be less risky and, when comparing its historical volatility, Regions Financial is 1.91 times less risky than Inter Co. The stock trades about -0.02 of its potential returns per unit of risk. The Inter Co Class is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 413.00 in Inter Co Class on November 28, 2024 and sell it today you would earn a total of 121.00 from holding Inter Co Class or generate 29.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. Inter Co Class
Performance |
| Timeline |
| Regions Financial |
| Inter Co Class |
Regions Financial and Inter Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Inter Co
The main advantage of trading using opposite Regions Financial and Inter Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Inter Co 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 Inter Co will offset losses from the drop in Inter Co's long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| Inter Co vs. Community West Bancshares | Inter Co vs. First Financial Northwest | Inter Co vs. First Northwest Bancorp | Inter Co 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |