Correlation Between Regions Financial and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both Regions Financial and NH HOTEL 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 NH HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and NH HOTEL GROUP, you can compare the effects of market volatilities on Regions Financial and NH HOTEL 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 NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and NH HOTEL.
Diversification Opportunities for Regions Financial and NH HOTEL
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Regions and NH5 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP 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 NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of Regions Financial i.e., Regions Financial and NH HOTEL go up and down completely randomly.
Pair Corralation between Regions Financial and NH HOTEL
Assuming the 90 days horizon Regions Financial is expected to generate 3.96 times less return on investment than NH HOTEL. But when comparing it to its historical volatility, Regions Financial is 1.64 times less risky than NH HOTEL. It trades about 0.02 of its potential returns per unit of risk. NH HOTEL GROUP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 372.00 in NH HOTEL GROUP on January 10, 2025 and sell it today you would earn a total of 256.00 from holding NH HOTEL GROUP or generate 68.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. NH HOTEL GROUP
Performance |
| Timeline |
| Regions Financial |
| NH HOTEL GROUP |
Regions Financial and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and NH HOTEL
The main advantage of trading using opposite Regions Financial and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, NH HOTEL 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| Regions Financial vs. tokentus investment AG | Regions Financial vs. AOYAMA TRADING | Regions Financial vs. ETFS Coffee ETC | Regions Financial vs. ALTAIR RES INC |
| NH HOTEL vs. GOODYEAR T RUBBER | NH HOTEL vs. Hyster Yale Materials Handling | NH HOTEL vs. Harmony Gold Mining | NH HOTEL vs. APPLIED MATERIALS |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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