Correlation Between Virginia National and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Virginia National 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 Virginia National and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virginia National Bankshares and Regions Financial, you can compare the effects of market volatilities on Virginia National 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 Virginia National with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and Regions Financial.
Diversification Opportunities for Virginia National and Regions Financial
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virginia and Regions is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and Virginia National 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 Virginia National Bankshares 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 Virginia National i.e., Virginia National and Regions Financial go up and down completely randomly.
Pair Corralation between Virginia National and Regions Financial
Given the investment horizon of 90 days Virginia National Bankshares is expected to generate 1.48 times more return on investment than Regions Financial. However, Virginia National is 1.48 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 0.03 per unit of risk. If you would invest 3,554 in Virginia National Bankshares on November 18, 2024 and sell it today you would earn a total of 102.00 from holding Virginia National Bankshares or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virginia National Bankshares vs. Regions Financial
Performance |
| Timeline |
| Virginia National |
| Regions Financial |
Virginia National and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virginia National and Regions Financial
The main advantage of trading using opposite Virginia National and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National 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.| Virginia National vs. Finward Bancorp | Virginia National vs. Community West Bancshares | Virginia National vs. First Financial Northwest | Virginia National vs. Oak Valley Bancorp |
| Regions Financial vs. Home Federal Bancorp | Regions Financial vs. Lake Shore Bancorp | Regions Financial vs. Old Point Financial | Regions Financial vs. Parke Bancorp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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