Correlation Between Regions Financial and Fidelity
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Fidelity 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 Fidelity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Fidelity DD Bancorp, you can compare the effects of market volatilities on Regions Financial and Fidelity 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 Fidelity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Fidelity.
Diversification Opportunities for Regions Financial and Fidelity
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Regions and Fidelity is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Fidelity DD Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity DD 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 Fidelity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity DD Bancorp has no effect on the direction of Regions Financial i.e., Regions Financial and Fidelity go up and down completely randomly.
Pair Corralation between Regions Financial and Fidelity
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.64 times more return on investment than Fidelity. However, Regions Financial is 1.56 times less risky than Fidelity. It trades about -0.07 of its potential returns per unit of risk. Fidelity DD Bancorp is currently generating about -0.06 per unit of risk. If you would invest 2,341 in Regions Financial on December 29, 2024 and sell it today you would lose (148.00) from holding Regions Financial or give up 6.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Regions Financial vs. Fidelity DD Bancorp
Performance |
Timeline |
Regions Financial |
Fidelity DD Bancorp |
Regions Financial and Fidelity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Regions Financial and Fidelity
The main advantage of trading using opposite Regions Financial and Fidelity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Fidelity 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 Fidelity will offset losses from the drop in Fidelity's long position.Regions Financial vs. Home Bancorp | Regions Financial vs. Rhinebeck Bancorp | Regions Financial vs. LINKBANCORP | Regions Financial vs. Magyar Bancorp |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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