Correlation Between Regions Financial and Oak Valley
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Oak Valley 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 Oak Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Oak Valley Bancorp, you can compare the effects of market volatilities on Regions Financial and Oak Valley 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 Oak Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Oak Valley.
Diversification Opportunities for Regions Financial and Oak Valley
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regions and Oak is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Oak Valley Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Valley 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 Oak Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Valley Bancorp has no effect on the direction of Regions Financial i.e., Regions Financial and Oak Valley go up and down completely randomly.
Pair Corralation between Regions Financial and Oak Valley
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.72 times more return on investment than Oak Valley. However, Regions Financial is 1.39 times less risky than Oak Valley. It trades about 0.14 of its potential returns per unit of risk. Oak Valley Bancorp is currently generating about 0.06 per unit of risk. If you would invest 1,820 in Regions Financial on August 27, 2024 and sell it today you would earn a total of 908.00 from holding Regions Financial or generate 49.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. Oak Valley Bancorp
Performance |
| Timeline |
| Regions Financial |
| Oak Valley Bancorp |
Regions Financial and Oak Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Oak Valley
The main advantage of trading using opposite Regions Financial and Oak Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Oak Valley 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 Oak Valley will offset losses from the drop in Oak Valley's long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| Oak Valley vs. Fifth Third Bancorp | Oak Valley vs. Zions Bancorporation | Oak Valley vs. Huntington Bancshares Incorporated | Oak Valley vs. PNC Financial Services |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |