Correlation Between Regions Financial and Washington Trust
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Washington Trust 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 Washington Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Washington Trust Bancorp, you can compare the effects of market volatilities on Regions Financial and Washington Trust 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 Washington Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Washington Trust.
Diversification Opportunities for Regions Financial and Washington Trust
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regions and Washington is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Washington Trust Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Trust 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 Washington Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Trust Bancorp has no effect on the direction of Regions Financial i.e., Regions Financial and Washington Trust go up and down completely randomly.
Pair Corralation between Regions Financial and Washington Trust
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.79 times more return on investment than Washington Trust. However, Regions Financial is 1.27 times less risky than Washington Trust. It trades about 0.04 of its potential returns per unit of risk. Washington Trust Bancorp is currently generating about 0.0 per unit of risk. If you would invest 1,967 in Regions Financial on August 27, 2024 and sell it today you would earn a total of 761.00 from holding Regions Financial or generate 38.69% 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. Washington Trust Bancorp
Performance |
| Timeline |
| Regions Financial |
| Washington Trust Bancorp |
Regions Financial and Washington Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Washington Trust
The main advantage of trading using opposite Regions Financial and Washington Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Washington Trust 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 Washington Trust will offset losses from the drop in Washington Trust's long position.| Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
| Washington Trust vs. Univest Pennsylvania | Washington Trust vs. Waterstone Financial | Washington Trust vs. Mid Penn Bancorp | Washington Trust vs. ST Bancorp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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