Correlation Between Regions Financial and Stock Yards
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Stock Yards 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 Stock Yards into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Stock Yards Bancorp, you can compare the effects of market volatilities on Regions Financial and Stock Yards 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 Stock Yards. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Stock Yards.
Diversification Opportunities for Regions Financial and Stock Yards
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regions and Stock is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Stock Yards Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Yards 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 Stock Yards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Yards Bancorp has no effect on the direction of Regions Financial i.e., Regions Financial and Stock Yards go up and down completely randomly.
Pair Corralation between Regions Financial and Stock Yards
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 1.11 times less return on investment than Stock Yards. But when comparing it to its historical volatility, Regions Financial is 1.15 times less risky than Stock Yards. It trades about 0.24 of its potential returns per unit of risk. Stock Yards Bancorp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 6,690 in Stock Yards Bancorp on August 28, 2024 and sell it today you would earn a total of 1,052 from holding Stock Yards Bancorp or generate 15.72% 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. Stock Yards Bancorp
Performance |
| Timeline |
| Regions Financial |
| Stock Yards Bancorp |
Regions Financial and Stock Yards Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Stock Yards
The main advantage of trading using opposite Regions Financial and Stock Yards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Stock Yards 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 Stock Yards will offset losses from the drop in Stock Yards' long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| Stock Yards vs. First National Corp | Stock Yards vs. Southern Missouri Bancorp | Stock Yards vs. Shore Bancshares | Stock Yards 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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