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Correlation Between Wells Fargo and Regions Financial

Analyzing existing cross correlation between Wells Fargo Company and Regions Financial Corporation. You can compare the effects of market volatilities on Wells Fargo 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 Wells Fargo with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and Regions Financial.

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Diversification Opportunities for Wells Fargo and Regions Financial

Wells Fargo Company diversification synergy
0.74
<div class='circular--portrait-small' style='background:#FF9E01;color: white;font-size:1.1em;padding-top: 12px;;'>WFC</div>
<div class='circular--portrait-small' style='background:#FCD202;color: white;font-size:1.6em;padding-top: 6px;;'>RF</div>

Poor diversification

The 3 months correlation between Wells and Regions is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo Company and Regions Financial Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and Wells Fargo 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 Wells Fargo Company 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 Wells Fargo i.e. Wells Fargo and Regions Financial go up and down completely randomly.

Pair Corralation between Wells Fargo and Regions Financial

Considering 30-days investment horizon, Wells Fargo Company is expected to under-perform the Regions Financial. But the stock apears to be less risky and, when comparing its historical volatility, Wells Fargo Company is 1.01 times less risky than Regions Financial. The stock trades about -0.23 of its potential returns per unit of risk. The Regions Financial Corporation is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  1,674  in Regions Financial Corporation on January 26, 2020 and sell it today you would lose (146.00)  from holding Regions Financial Corporation or give up 8.72% of portfolio value over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.39%
ValuesDaily Returns

Wells Fargo Company  vs.  Regions Financial Corp.

 Performance (%) 
    
  Timeline 
Wells Fargo 
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Risk-Adjusted Performance

Over the last 30 days Wells Fargo Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2020. The current disturbance may also be a sign of long term up-swing for the company investors.
Regions Financial 
00

Risk-Adjusted Performance

Over the last 30 days Regions Financial Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental drivers remain sound and the ongoing tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Wells Fargo and Regions Financial Volatility Contrast

 Predicted Return Density 
    
  Returns 
Check out your portfolio center. Please also try Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.