Correlation Between Regions Financial and PNC Financial
Can any of the company-specific risk be diversified away by investing in both Regions Financial and PNC Financial 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 PNC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and PNC Financial Services, you can compare the effects of market volatilities on Regions Financial and PNC Financial 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 PNC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and PNC Financial.
Diversification Opportunities for Regions Financial and PNC Financial
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regions and PNC is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and PNC Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Financial Services 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 PNC Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Financial Services has no effect on the direction of Regions Financial i.e., Regions Financial and PNC Financial go up and down completely randomly.
Pair Corralation between Regions Financial and PNC Financial
Allowing for the 90-day total investment horizon Regions Financial is expected to under-perform the PNC Financial. In addition to that, Regions Financial is 1.23 times more volatile than PNC Financial Services. It trades about -0.11 of its total potential returns per unit of risk. PNC Financial Services is currently generating about -0.07 per unit of volatility. If you would invest 20,683 in PNC Financial Services on October 19, 2024 and sell it today you would lose (829.00) from holding PNC Financial Services or give up 4.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. PNC Financial Services
Performance |
| Timeline |
| Regions Financial |
| PNC Financial Services |
Regions Financial and PNC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and PNC Financial
The main advantage of trading using opposite Regions Financial and PNC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, PNC Financial 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 PNC Financial will offset losses from the drop in PNC Financial's long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| PNC Financial vs. Truist Financial Corp | PNC Financial vs. KeyCorp | PNC Financial vs. Western Alliance Bancorporation | PNC Financial 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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