Correlation Between BBB Foods and Regions Financial
Can any of the company-specific risk be diversified away by investing in both BBB Foods 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 BBB Foods and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BBB Foods and Regions Financial, you can compare the effects of market volatilities on BBB Foods 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 BBB Foods with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBB Foods and Regions Financial.
Diversification Opportunities for BBB Foods and Regions Financial
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BBB and Regions is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding BBB Foods and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and BBB Foods 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 BBB Foods 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 BBB Foods i.e., BBB Foods and Regions Financial go up and down completely randomly.
Pair Corralation between BBB Foods and Regions Financial
Given the investment horizon of 90 days BBB Foods is expected to generate 2.54 times more return on investment than Regions Financial. However, BBB Foods is 2.54 times more volatile than Regions Financial. It trades about 0.09 of its potential returns per unit of risk. Regions Financial is currently generating about 0.05 per unit of risk. If you would invest 1,750 in BBB Foods on August 31, 2024 and sell it today you would earn a total of 1,072 from holding BBB Foods or generate 61.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 54.81% |
| Values | Daily Returns |
BBB Foods vs. Regions Financial
Performance |
| Timeline |
| BBB Foods |
| Regions Financial |
BBB Foods and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BBB Foods and Regions Financial
The main advantage of trading using opposite BBB Foods and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBB Foods 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.| BBB Foods vs. Citizens Bancorp Investment | BBB Foods vs. Stepstone Group | BBB Foods vs. Independence Realty Trust | BBB Foods vs. Western Sierra Mining |
| Regions Financial vs. Maiden Holdings | Regions Financial vs. Nextplat Corp | Regions Financial vs. Aegon NV ADR | Regions Financial vs. Analog Devices |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |