Correlation Between Regions Financial and Catalyst Bancorp
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Catalyst Bancorp 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 Catalyst Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Catalyst Bancorp, you can compare the effects of market volatilities on Regions Financial and Catalyst Bancorp 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 Catalyst Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Catalyst Bancorp.
Diversification Opportunities for Regions Financial and Catalyst Bancorp
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Regions and Catalyst is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Catalyst Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Bancorp 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 are associated (or correlated) with Catalyst Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Bancorp has no effect on the direction of Regions Financial i.e., Regions Financial and Catalyst Bancorp go up and down completely randomly.
Pair Corralation between Regions Financial and Catalyst Bancorp
Allowing for the 90-day total investment horizon Regions Financial is expected to under-perform the Catalyst Bancorp. In addition to that, Regions Financial is 1.38 times more volatile than Catalyst Bancorp. It trades about -0.14 of its total potential returns per unit of risk. Catalyst Bancorp is currently generating about 0.0 per unit of volatility. If you would invest 1,180 in Catalyst Bancorp on December 4, 2024 and sell it today you would lose (6.00) from holding Catalyst Bancorp or give up 0.51% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Regions Financial vs. Catalyst Bancorp
Performance |
Timeline |
Regions Financial |
Catalyst Bancorp |
Regions Financial and Catalyst Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Regions Financial and Catalyst Bancorp
The main advantage of trading using opposite Regions Financial and Catalyst Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Catalyst Bancorp 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 Catalyst Bancorp will offset losses from the drop in Catalyst Bancorp's long position.Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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