Correlation Between Synovus Financial and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Synovus Financial and Regions Financial 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 Synovus Financial and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synovus Financial Corp and Regions Financial, you can compare the effects of market volatilities on Synovus Financial and Regions Financial 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 Synovus Financial with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synovus Financial and Regions Financial.
Diversification Opportunities for Synovus Financial and Regions Financial
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Synovus and Regions is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Synovus Financial Corp and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and Synovus 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 Synovus Financial Corp are associated (or correlated) with Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial has no effect on the direction of Synovus Financial i.e., Synovus Financial and Regions Financial go up and down completely randomly.
Pair Corralation between Synovus Financial and Regions Financial
Assuming the 90 days trading horizon Synovus Financial is expected to generate 2.56 times less return on investment than Regions Financial. But when comparing it to its historical volatility, Synovus Financial Corp is 2.65 times less risky than Regions Financial. It trades about 0.14 of its potential returns per unit of risk. Regions Financial is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,742 in Regions Financial on September 1, 2024 and sell it today you would earn a total of 256.00 from holding Regions Financial or generate 14.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Synovus Financial Corp vs. Regions Financial
Performance |
| Timeline |
| Synovus Financial Corp |
| Regions Financial |
Synovus Financial and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synovus Financial and Regions Financial
The main advantage of trading using opposite Synovus Financial and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synovus Financial position performs unexpectedly, Regions Financial 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 Regions Financial will offset losses from the drop in Regions Financial's long position.| Synovus Financial vs. KeyCorp | Synovus Financial vs. KeyCorp | Synovus Financial vs. Fifth Third Bancorp | Synovus Financial vs. Citizens Financial Group |
| Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. First Citizens BancShares | Regions Financial vs. Huntington Bancshares Incorporated |
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 CEOs Directory module to screen CEOs from public companies around the world.
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