Correlation Between Regions Financial and Seacoast Banking
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Seacoast Banking 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 Seacoast Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Seacoast Banking, you can compare the effects of market volatilities on Regions Financial and Seacoast Banking 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 Seacoast Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Seacoast Banking.
Diversification Opportunities for Regions Financial and Seacoast Banking
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regions and Seacoast is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Seacoast Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seacoast Banking 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 Seacoast Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seacoast Banking has no effect on the direction of Regions Financial i.e., Regions Financial and Seacoast Banking go up and down completely randomly.
Pair Corralation between Regions Financial and Seacoast Banking
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.87 times more return on investment than Seacoast Banking. However, Regions Financial is 1.15 times less risky than Seacoast Banking. It trades about 0.22 of its potential returns per unit of risk. Seacoast Banking is currently generating about 0.17 per unit of risk. If you would invest 2,406 in Regions Financial on August 29, 2024 and sell it today you would earn a total of 319.00 from holding Regions Financial or generate 13.26% 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. Seacoast Banking
Performance |
| Timeline |
| Regions Financial |
| Seacoast Banking |
Regions Financial and Seacoast Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Seacoast Banking
The main advantage of trading using opposite Regions Financial and Seacoast Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Seacoast Banking 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 Seacoast Banking will offset losses from the drop in Seacoast Banking's long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| Seacoast Banking vs. Home Federal Bancorp | Seacoast Banking vs. First Financial Northwest | Seacoast Banking vs. First Northwest Bancorp | Seacoast Banking vs. First Capital |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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