Correlation Between Regions Financial and Prosperity Bancshares
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Prosperity Bancshares 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 Prosperity Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Prosperity Bancshares, you can compare the effects of market volatilities on Regions Financial and Prosperity Bancshares 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 Prosperity Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Prosperity Bancshares.
Diversification Opportunities for Regions Financial and Prosperity Bancshares
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regions and Prosperity is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Prosperity Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosperity Bancshares 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 Prosperity Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosperity Bancshares has no effect on the direction of Regions Financial i.e., Regions Financial and Prosperity Bancshares go up and down completely randomly.
Pair Corralation between Regions Financial and Prosperity Bancshares
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 1.09 times more return on investment than Prosperity Bancshares. However, Regions Financial is 1.09 times more volatile than Prosperity Bancshares. It trades about 0.03 of its potential returns per unit of risk. Prosperity Bancshares is currently generating about -0.05 per unit of risk. If you would invest 2,420 in Regions Financial on November 18, 2024 and sell it today you would earn a total of 12.00 from holding Regions Financial or generate 0.5% 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. Prosperity Bancshares
Performance |
| Timeline |
| Regions Financial |
| Prosperity Bancshares |
Regions Financial and Prosperity Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Prosperity Bancshares
The main advantage of trading using opposite Regions Financial and Prosperity Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Prosperity Bancshares 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 Prosperity Bancshares will offset losses from the drop in Prosperity Bancshares' long position.| Regions Financial vs. Home Federal Bancorp | Regions Financial vs. Lake Shore Bancorp | Regions Financial vs. Old Point Financial | Regions Financial vs. Parke Bancorp |
| Prosperity Bancshares vs. Heritage Commerce Corp | Prosperity Bancshares vs. Business First Bancshares | Prosperity Bancshares vs. German American Bancorp | Prosperity Bancshares vs. Texas Capital Bancshares |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |