Correlation Between Regions Financial and Pinnacle Financial
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Pinnacle 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 Pinnacle 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 Pinnacle Financial Partners, you can compare the effects of market volatilities on Regions Financial and Pinnacle 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 Pinnacle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Pinnacle Financial.
Diversification Opportunities for Regions Financial and Pinnacle Financial
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regions and Pinnacle is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Pinnacle Financial Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Financial 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 Pinnacle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Financial has no effect on the direction of Regions Financial i.e., Regions Financial and Pinnacle Financial go up and down completely randomly.
Pair Corralation between Regions Financial and Pinnacle Financial
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 1.44 times less return on investment than Pinnacle Financial. But when comparing it to its historical volatility, Regions Financial is 1.37 times less risky than Pinnacle Financial. It trades about 0.24 of its potential returns per unit of risk. Pinnacle Financial Partners is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 10,523 in Pinnacle Financial Partners on September 1, 2024 and sell it today you would earn a total of 2,188 from holding Pinnacle Financial Partners or generate 20.79% 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. Pinnacle Financial Partners
Performance |
| Timeline |
| Regions Financial |
| Pinnacle Financial |
Regions Financial and Pinnacle Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Pinnacle Financial
The main advantage of trading using opposite Regions Financial and Pinnacle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Pinnacle 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 Pinnacle Financial will offset losses from the drop in Pinnacle 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 |
| Pinnacle Financial vs. Wintrust Financial | Pinnacle Financial vs. Renasant | Pinnacle Financial vs. Texas Capital Bancshares | Pinnacle Financial vs. Home 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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