Correlation Between Regions Financial and NIPPON STEEL
Can any of the company-specific risk be diversified away by investing in both Regions Financial and NIPPON STEEL 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 NIPPON STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and NIPPON STEEL SPADR, you can compare the effects of market volatilities on Regions Financial and NIPPON STEEL 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 NIPPON STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and NIPPON STEEL.
Diversification Opportunities for Regions Financial and NIPPON STEEL
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Regions and NIPPON is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and NIPPON STEEL SPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIPPON STEEL SPADR 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 NIPPON STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIPPON STEEL SPADR has no effect on the direction of Regions Financial i.e., Regions Financial and NIPPON STEEL go up and down completely randomly.
Pair Corralation between Regions Financial and NIPPON STEEL
Assuming the 90 days horizon Regions Financial is expected to generate 1.09 times less return on investment than NIPPON STEEL. But when comparing it to its historical volatility, Regions Financial is 1.43 times less risky than NIPPON STEEL. It trades about 0.02 of its potential returns per unit of risk. NIPPON STEEL SPADR is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 555.00 in NIPPON STEEL SPADR on January 14, 2025 and sell it today you would earn a total of 25.00 from holding NIPPON STEEL SPADR or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. NIPPON STEEL SPADR
Performance |
| Timeline |
| Regions Financial |
| NIPPON STEEL SPADR |
Regions Financial and NIPPON STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and NIPPON STEEL
The main advantage of trading using opposite Regions Financial and NIPPON STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, NIPPON STEEL 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 NIPPON STEEL will offset losses from the drop in NIPPON STEEL's long position.| Regions Financial vs. US Bancorp | Regions Financial vs. The PNC Financial | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. MT Bank Corp |
| NIPPON STEEL vs. Western Copper and | NIPPON STEEL vs. Nanjing Panda Electronics | NIPPON STEEL vs. De Grey Mining | NIPPON STEEL vs. ARDAGH METAL PACDL 0001 |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |