Correlation Between TBC Bank and Regions Financial
Can any of the company-specific risk be diversified away by investing in both TBC Bank 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 TBC Bank and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TBC Bank Group and Regions Financial Corp, you can compare the effects of market volatilities on TBC Bank 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 TBC Bank with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TBC Bank and Regions Financial.
Diversification Opportunities for TBC Bank and Regions Financial
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TBC and Regions is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding TBC Bank Group and Regions Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial Corp and TBC Bank 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 TBC Bank Group 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 Corp has no effect on the direction of TBC Bank i.e., TBC Bank and Regions Financial go up and down completely randomly.
Pair Corralation between TBC Bank and Regions Financial
Assuming the 90 days trading horizon TBC Bank Group is expected to generate 1.59 times more return on investment than Regions Financial. However, TBC Bank is 1.59 times more volatile than Regions Financial Corp. It trades about 0.37 of its potential returns per unit of risk. Regions Financial Corp is currently generating about -0.14 per unit of risk. If you would invest 297,500 in TBC Bank Group on December 12, 2024 and sell it today you would earn a total of 124,500 from holding TBC Bank Group or generate 41.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TBC Bank Group vs. Regions Financial Corp
Performance |
| Timeline |
| TBC Bank Group |
| Regions Financial Corp |
TBC Bank and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TBC Bank and Regions Financial
The main advantage of trading using opposite TBC Bank and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TBC Bank 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.| TBC Bank vs. Solstad Offshore ASA | ||
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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