Correlation Between Various Eateries and Regions Financial

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

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

Diversification Opportunities for Various Eateries and Regions Financial

0.26

Correlation Coefficient

Various Eateries  Regions Financial

Modest diversification

The 3 months correlation between Various and Regions is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Various Eateries PLC 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 Various Eateries 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 Various Eateries PLC 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 Various Eateries i.e., Various Eateries and Regions Financial go up and down completely randomly.

Pair Corralation between Various Eateries and Regions Financial

Assuming the 90 days trading horizon Various Eateries PLC is expected to generate 0.54 times more return on investment than Regions Financial. However, Various Eateries PLC is 1.85 times less risky than Regions Financial. It trades about -0.24 of its potential returns per unit of risk. Regions Financial Corp is currently generating about -0.15 per unit of risk. If you would invest  1,775  in Various Eateries PLC on October 7, 2024 and sell it today you would lose (125.00) from holding Various Eateries PLC or give up 7.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.62%
Values	Daily Returns

Various Eateries PLC  vs.  Regions Financial Corp

Various Eateries PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Various Eateries PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Regions Financial Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Regions Financial Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Regions Financial is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Various Eateries and Regions Financial

The main advantage of trading using opposite Various Eateries and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Various Eateries 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 Various Eateries PLC 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.