Correlation Between WesBanco and Regions Financial
Can any of the company-specific risk be diversified away by investing in both WesBanco 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 WesBanco and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WesBanco and Regions Financial, you can compare the effects of market volatilities on WesBanco 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 WesBanco with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of WesBanco and Regions Financial.
Diversification Opportunities for WesBanco and Regions Financial
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WesBanco and Regions is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding WesBanco and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and WesBanco 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 WesBanco 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 WesBanco i.e., WesBanco and Regions Financial go up and down completely randomly.
Pair Corralation between WesBanco and Regions Financial
If you would invest 2,500 in WesBanco on August 31, 2024 and sell it today you would earn a total of 14.00 from holding WesBanco or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WesBanco vs. Regions Financial
Performance |
| Timeline |
| WesBanco |
| Regions Financial |
WesBanco and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WesBanco and Regions Financial
The main advantage of trading using opposite WesBanco and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WesBanco 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.The idea behind WesBanco and Regions Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Regions Financial vs. KeyCorp | Regions Financial vs. US Bancorp | Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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