Correlation Between Regions Financial and Grupo Carso
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Grupo Carso 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 Grupo Carso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Grupo Carso SAB, you can compare the effects of market volatilities on Regions Financial and Grupo Carso 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 Grupo Carso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Grupo Carso.
Diversification Opportunities for Regions Financial and Grupo Carso
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Regions and Grupo is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB 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 Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of Regions Financial i.e., Regions Financial and Grupo Carso go up and down completely randomly.
Pair Corralation between Regions Financial and Grupo Carso
Assuming the 90 days horizon Regions Financial is expected to generate 0.51 times more return on investment than Grupo Carso. However, Regions Financial is 1.97 times less risky than Grupo Carso. It trades about 0.12 of its potential returns per unit of risk. Grupo Carso SAB is currently generating about -0.02 per unit of risk. If you would invest 1,683 in Regions Financial on September 3, 2024 and sell it today you would earn a total of 917.00 from holding Regions Financial or generate 54.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. Grupo Carso SAB
Performance |
| Timeline |
| Regions Financial |
| Grupo Carso SAB |
Regions Financial and Grupo Carso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Grupo Carso
The main advantage of trading using opposite Regions Financial and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Grupo Carso 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 Grupo Carso will offset losses from the drop in Grupo Carso's long position.| Regions Financial vs. Perma Fix Environmental Services | Regions Financial vs. ALGOMA STEEL GROUP | Regions Financial vs. USU Software AG | Regions Financial vs. Steel Dynamics |
| Grupo Carso vs. Cleanaway Waste Management | Grupo Carso vs. TAL Education Group | Grupo Carso vs. Major Drilling Group | Grupo Carso vs. STRAYER EDUCATION |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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