Correlation Between Stifel Financial and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Stifel Financial 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 Stifel Financial and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and Regions Financial, you can compare the effects of market volatilities on Stifel Financial 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 Stifel Financial with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Regions Financial.
Diversification Opportunities for Stifel Financial and Regions Financial
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stifel and Regions is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and Stifel 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 Stifel Financial 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 has no effect on the direction of Stifel Financial i.e., Stifel Financial and Regions Financial go up and down completely randomly.
Pair Corralation between Stifel Financial and Regions Financial
Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 0.89 times more return on investment than Regions Financial. However, Stifel Financial is 1.12 times less risky than Regions Financial. It trades about 0.03 of its potential returns per unit of risk. Regions Financial is currently generating about 0.01 per unit of risk. If you would invest 6,191 in Stifel Financial on January 17, 2024 and sell it today you would earn a total of 1,247 from holding Stifel Financial or generate 20.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stifel Financial vs. Regions Financial
Performance |
| Timeline |
| Stifel Financial |
| Regions Financial |
Stifel Financial and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and Regions Financial
The main advantage of trading using opposite Stifel Financial and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial 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.| Stifel Financial vs. JPMorgan Chase Co | Stifel Financial vs. Wells Fargo | Stifel Financial vs. Citigroup | Stifel Financial vs. American Express |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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