Correlation Between Truist Financial and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Truist 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 Truist 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 Truist Financial and Regions Financial, you can compare the effects of market volatilities on Truist 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 Truist Financial with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and Regions Financial.
Diversification Opportunities for Truist Financial and Regions Financial
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Truist and Regions is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and Truist 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 Truist Financial 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 Truist Financial i.e., Truist Financial and Regions Financial go up and down completely randomly.
Pair Corralation between Truist Financial and Regions Financial
Assuming the 90 days trading horizon Truist Financial is expected to under-perform the Regions Financial. In addition to that, Truist Financial is 1.01 times more volatile than Regions Financial. It trades about -0.02 of its total potential returns per unit of risk. Regions Financial is currently generating about 0.09 per unit of volatility. If you would invest 2,373 in Regions Financial on August 28, 2024 and sell it today you would earn a total of 111.00 from holding Regions Financial or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Truist Financial vs. Regions Financial
Performance |
| Timeline |
| Truist Financial |
| Regions Financial |
Truist Financial and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Truist Financial and Regions Financial
The main advantage of trading using opposite Truist Financial and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist 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.| Truist Financial vs. Truist Financial | Truist Financial vs. US Bancorp | Truist Financial vs. Truist Financial | Truist Financial vs. MetLife Preferred Stock |
| Regions Financial vs. Capital One Financial | Regions Financial vs. Capital One Financial | Regions Financial vs. Bank of America |
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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