Correlation Between Regions Financial and GRUPO CARSO-A1

Can any of the company-specific risk be diversified away by investing in both Regions Financial and GRUPO CARSO-A1 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 GRUPO CARSO-A1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Regions Financial and GRUPO CARSO A1, you can compare the effects of market volatilities on Regions Financial and GRUPO CARSO-A1 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 GRUPO CARSO-A1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and GRUPO CARSO-A1.

Diversification Opportunities for Regions Financial and GRUPO CARSO-A1

0.07

Correlation Coefficient

Regions Financial  GRUPO CARSO-A1

Significant diversification

The 3 months correlation between Regions and GRUPO is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and GRUPO CARSO A1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO CARSO A1 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 GRUPO CARSO-A1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO CARSO A1 has no effect on the direction of Regions Financial i.e., Regions Financial and GRUPO CARSO-A1 go up and down completely randomly.

Pair Corralation between Regions Financial and GRUPO CARSO-A1

Assuming the 90 days horizon Regions Financial is expected to generate 0.54 times more return on investment than GRUPO CARSO-A1. However, Regions Financial is 1.84 times less risky than GRUPO CARSO-A1. It trades about 0.07 of its potential returns per unit of risk. GRUPO CARSO A1 is currently generating about 0.02 per unit of risk. If you would invest  2,159  in Regions Financial on October 22, 2024 and sell it today you would earn a total of  181.00  from holding Regions Financial or generate 8.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Regions Financial  vs.  GRUPO CARSO A1

Regions Financial

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Regions Financial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Regions Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

GRUPO CARSO A1

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GRUPO CARSO A1 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, GRUPO CARSO-A1 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 Regions Financial and GRUPO CARSO-A1

The main advantage of trading using opposite Regions Financial and GRUPO CARSO-A1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, GRUPO CARSO-A1 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 GRUPO CARSO-A1 will offset losses from the drop in GRUPO CARSO-A1's long position.

The idea behind Regions Financial and GRUPO CARSO A1 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..