Correlation Between Amedeo Air and Regions Financial

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

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

Diversification Opportunities for Amedeo Air and Regions Financial

0.59

Correlation Coefficient

Amedeo Air  Regions Financial

Very weak diversification

The 3 months correlation between Amedeo and Regions is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Amedeo Air Four and Regions Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial Corp and Amedeo Air 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 Amedeo Air Four 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 Corp has no effect on the direction of Amedeo Air i.e., Amedeo Air and Regions Financial go up and down completely randomly.

Pair Corralation between Amedeo Air and Regions Financial

Assuming the 90 days trading horizon Amedeo Air is expected to generate 1.13 times less return on investment than Regions Financial. But when comparing it to its historical volatility, Amedeo Air Four is 2.33 times less risky than Regions Financial. It trades about 0.2 of its potential returns per unit of risk. Regions Financial Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,502  in Regions Financial Corp on September 23, 2024 and sell it today you would earn a total of  854.00  from holding Regions Financial Corp or generate 56.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.63%
Values	Daily Returns

Amedeo Air Four  vs.  Regions Financial Corp

Amedeo Air Four

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amedeo Air Four are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Amedeo Air may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Regions Financial Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Regions Financial Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Regions Financial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Amedeo Air and Regions Financial

The main advantage of trading using opposite Amedeo Air and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedeo Air 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 Amedeo Air Four and Regions Financial Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.