Correlation Between Heavitree Brewery and Regions Financial

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

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

Diversification Opportunities for Heavitree Brewery and Regions Financial

0.72

Correlation Coefficient

Heavitree Brewery  Regions Financial

Poor diversification

The 3 months correlation between Heavitree and Regions is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Heavitree Brewery 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 Heavitree Brewery 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 Heavitree Brewery 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 Heavitree Brewery i.e., Heavitree Brewery and Regions Financial go up and down completely randomly.

Pair Corralation between Heavitree Brewery and Regions Financial

Assuming the 90 days trading horizon Heavitree Brewery is expected to under-perform the Regions Financial. In addition to that, Heavitree Brewery is 2.36 times more volatile than Regions Financial Corp. It trades about -0.09 of its total potential returns per unit of risk. Regions Financial Corp is currently generating about -0.06 per unit of volatility. If you would invest  2,381  in Regions Financial Corp on December 25, 2024 and sell it today you would lose (159.00) from holding Regions Financial Corp or give up 6.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Heavitree Brewery  vs.  Regions Financial Corp

Heavitree Brewery

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heavitree Brewery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Regions Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Regions Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Heavitree Brewery and Regions Financial

The main advantage of trading using opposite Heavitree Brewery and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heavitree Brewery 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 Heavitree Brewery 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.