Correlation Between Regions Financial and New York
Can any of the company-specific risk be diversified away by investing in both Regions Financial and New York 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 New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and New York Community, you can compare the effects of market volatilities on Regions Financial and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and New York.
Diversification Opportunities for Regions Financial and New York
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Regions and New is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and New York Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Community 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Community has no effect on the direction of Regions Financial i.e., Regions Financial and New York go up and down completely randomly.
Pair Corralation between Regions Financial and New York
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.3 times more return on investment than New York. However, Regions Financial is 3.33 times less risky than New York. It trades about 0.12 of its potential returns per unit of risk. New York Community is currently generating about -0.04 per unit of risk. If you would invest 1,670 in Regions Financial on August 27, 2024 and sell it today you would earn a total of 1,058 from holding Regions Financial or generate 63.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.94% |
| Values | Daily Returns |
Regions Financial vs. New York Community
Performance |
| Timeline |
| Regions Financial |
| New York Community |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Regions Financial and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and New York
The main advantage of trading using opposite Regions Financial and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| New York vs. KeyCorp | New York vs. Fifth Third Bancorp | New York vs. Regions Financial | New York vs. Zions Bancorporation |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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