Correlation Between Regions Financial and First Financial
Can any of the company-specific risk be diversified away by investing in both Regions Financial and First 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 Regions Financial and First Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and First Financial Northwest, you can compare the effects of market volatilities on Regions Financial and First 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 Regions Financial with a short position of First Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and First Financial.
Diversification Opportunities for Regions Financial and First Financial
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Regions and First is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and First Financial Northwest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Financial Northwest 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 First Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Financial Northwest has no effect on the direction of Regions Financial i.e., Regions Financial and First Financial go up and down completely randomly.
Pair Corralation between Regions Financial and First Financial
Allowing for the 90-day total investment horizon Regions Financial is expected to under-perform the First Financial. In addition to that, Regions Financial is 2.24 times more volatile than First Financial Northwest. It trades about -0.14 of its total potential returns per unit of risk. First Financial Northwest is currently generating about 0.0 per unit of volatility. If you would invest 2,114 in First Financial Northwest on December 4, 2024 and sell it today you would lose (1.00) from holding First Financial Northwest or give up 0.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Regions Financial vs. First Financial Northwest
Performance |
Timeline |
Regions Financial |
First Financial Northwest |
Regions Financial and First Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Regions Financial and First Financial
The main advantage of trading using opposite Regions Financial and First Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, First 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 First Financial will offset losses from the drop in First Financial's long position.Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. Zions Bancorporation | Regions Financial vs. Huntington Bancshares Incorporated |
First Financial vs. Home Federal Bancorp | First Financial vs. First Northwest Bancorp | First Financial vs. Community West Bancshares | First Financial vs. Magyar Bancorp |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
CEOs Directory Screen CEOs from public companies around the world | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |