Correlation Between Western Union and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Western Union 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 Western Union and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and Regions Financial, you can compare the effects of market volatilities on Western Union 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 Western Union with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Regions Financial.
Diversification Opportunities for Western Union and Regions Financial
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Western and Regions is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and Western Union 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 Western Union Co 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 Western Union i.e., Western Union and Regions Financial go up and down completely randomly.
Pair Corralation between Western Union and Regions Financial
Allowing for the 90-day total investment horizon Western Union Co is expected to under-perform the Regions Financial. In addition to that, Western Union is 3.59 times more volatile than Regions Financial. It trades about 0.0 of its total potential returns per unit of risk. Regions Financial is currently generating about 0.15 per unit of volatility. If you would invest 2,483 in Regions Financial on September 2, 2024 and sell it today you would earn a total of 157.00 from holding Regions Financial or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 18.95% |
| Values | Daily Returns |
Western Union Co vs. Regions Financial
Performance |
| Timeline |
| Western Union |
| Regions Financial |
Western Union and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Regions Financial
The main advantage of trading using opposite Western Union and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union 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.| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
| Regions Financial vs. Western Union Co | Regions Financial vs. Pintec Technology Holdings | Regions Financial vs. Encore Capital Group | Regions Financial vs. Pinterest |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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