Correlation Between Regions Financial and IShares Physical

Can any of the company-specific risk be diversified away by investing in both Regions Financial and IShares Physical 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 Regions Financial and IShares Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Regions Financial Corp and iShares Physical Silver, you can compare the effects of market volatilities on Regions Financial and IShares Physical 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 Regions Financial with a short position of IShares Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and IShares Physical.

Diversification Opportunities for Regions Financial and IShares Physical

0.04

Correlation Coefficient

Regions Financial  IShares Physical

Significant diversification

The 3 months correlation between Regions and IShares is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial Corp and iShares Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Physical Silver and Regions 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 Regions Financial Corp are associated (or correlated) with IShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Physical Silver has no effect on the direction of Regions Financial i.e., Regions Financial and IShares Physical go up and down completely randomly.

Pair Corralation between Regions Financial and IShares Physical

Assuming the 90 days trading horizon Regions Financial Corp is expected to generate 0.91 times more return on investment than IShares Physical. However, Regions Financial Corp is 1.1 times less risky than IShares Physical. It trades about 0.16 of its potential returns per unit of risk. iShares Physical Silver is currently generating about 0.09 per unit of risk. If you would invest  2,316  in Regions Financial Corp on September 3, 2024 and sell it today you would earn a total of  401.00  from holding Regions Financial Corp or generate 17.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Regions Financial Corp  vs.  iShares Physical Silver

Regions Financial Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Regions Financial Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Regions Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

iShares Physical Silver

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Physical Silver are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, IShares Physical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Regions Financial and IShares Physical

The main advantage of trading using opposite Regions Financial and IShares Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, IShares Physical 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 IShares Physical will offset losses from the drop in IShares Physical's long position.

The idea behind Regions Financial Corp and iShares Physical Silver 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.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.