Correlation Between Regions Financial and Kentucky First
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Kentucky First 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 Kentucky First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Kentucky First Federal, you can compare the effects of market volatilities on Regions Financial and Kentucky First 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 Kentucky First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Kentucky First.
Diversification Opportunities for Regions Financial and Kentucky First
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Regions and Kentucky is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Kentucky First Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentucky First Federal 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 Kentucky First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentucky First Federal has no effect on the direction of Regions Financial i.e., Regions Financial and Kentucky First go up and down completely randomly.
Pair Corralation between Regions Financial and Kentucky First
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.63 times more return on investment than Kentucky First. However, Regions Financial is 1.58 times less risky than Kentucky First. It trades about 0.04 of its potential returns per unit of risk. Kentucky First Federal is currently generating about -0.03 per unit of risk. If you would invest 1,732 in Regions Financial on December 2, 2024 and sell it today you would earn a total of 639.00 from holding Regions Financial or generate 36.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Regions Financial vs. Kentucky First Federal
Performance |
| Timeline |
| Regions Financial |
| Kentucky First Federal |
Regions Financial and Kentucky First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Kentucky First
The main advantage of trading using opposite Regions Financial and Kentucky First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Kentucky First 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 Kentucky First will offset losses from the drop in Kentucky First's long position.| Regions Financial vs. KeyCorp | ||
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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