Correlation Between Regions Financial and AMAG Austria
Can any of the company-specific risk be diversified away by investing in both Regions Financial and AMAG Austria 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 AMAG Austria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and AMAG Austria Metall, you can compare the effects of market volatilities on Regions Financial and AMAG Austria 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 AMAG Austria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and AMAG Austria.
Diversification Opportunities for Regions Financial and AMAG Austria
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Regions and AMAG is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and AMAG Austria Metall in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG Austria Metall 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 AMAG Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG Austria Metall has no effect on the direction of Regions Financial i.e., Regions Financial and AMAG Austria go up and down completely randomly.
Pair Corralation between Regions Financial and AMAG Austria
Assuming the 90 days horizon Regions Financial is expected to generate 1.15 times more return on investment than AMAG Austria. However, Regions Financial is 1.15 times more volatile than AMAG Austria Metall. It trades about 0.07 of its potential returns per unit of risk. AMAG Austria Metall is currently generating about 0.01 per unit of risk. If you would invest 2,260 in Regions Financial on October 29, 2024 and sell it today you would earn a total of 40.00 from holding Regions Financial or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. AMAG Austria Metall
Performance |
| Timeline |
| Regions Financial |
| AMAG Austria Metall |
Regions Financial and AMAG Austria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and AMAG Austria
The main advantage of trading using opposite Regions Financial and AMAG Austria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, AMAG Austria 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 AMAG Austria will offset losses from the drop in AMAG Austria's long position.| Regions Financial vs. The PNC Financial | Regions Financial vs. Huntington Bancshares Incorporated | Regions Financial vs. KeyCorp |
| AMAG Austria vs. Aya Gold Silver | AMAG Austria vs. MAGNUM MINING EXP | AMAG Austria vs. Carsales | AMAG Austria vs. BOS BETTER ONLINE |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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