Correlation Between Regions Financial and Old Second
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Old Second 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 Old Second into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Old Second Bancorp, you can compare the effects of market volatilities on Regions Financial and Old Second 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 Old Second. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Old Second.
Diversification Opportunities for Regions Financial and Old Second
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Regions and Old is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Old Second Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Second Bancorp 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 Old Second. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Second Bancorp has no effect on the direction of Regions Financial i.e., Regions Financial and Old Second go up and down completely randomly.
Pair Corralation between Regions Financial and Old Second
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 1.82 times less return on investment than Old Second. In addition to that, Regions Financial is 1.07 times more volatile than Old Second Bancorp. It trades about 0.22 of its total potential returns per unit of risk. Old Second Bancorp is currently generating about 0.43 per unit of volatility. If you would invest 1,722 in Old Second Bancorp on November 10, 2024 and sell it today you would earn a total of 197.00 from holding Old Second Bancorp or generate 11.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. Old Second Bancorp
Performance |
| Timeline |
| Regions Financial |
| Old Second Bancorp |
Regions Financial and Old Second Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Old Second
The main advantage of trading using opposite Regions Financial and Old Second positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Old Second 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 Old Second will offset losses from the drop in Old Second's long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| Old Second vs. Ohio Valley Banc | Old Second vs. Peoples Bancorp | Old Second vs. OceanFirst Financial Corp | Old Second vs. QCR Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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