Correlation Between Brookline Bancorp and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Brookline Bancorp 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 Brookline Bancorp and Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookline Bancorp and Regions Financial, you can compare the effects of market volatilities on Brookline Bancorp 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 Brookline Bancorp with a short position of Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookline Bancorp and Regions Financial.
Diversification Opportunities for Brookline Bancorp and Regions Financial
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brookline and Regions is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Brookline Bancorp and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial and Brookline Bancorp 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 Brookline Bancorp 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 Brookline Bancorp i.e., Brookline Bancorp and Regions Financial go up and down completely randomly.
Pair Corralation between Brookline Bancorp and Regions Financial
Given the investment horizon of 90 days Brookline Bancorp is expected to generate 1.07 times less return on investment than Regions Financial. In addition to that, Brookline Bancorp is 1.15 times more volatile than Regions Financial. It trades about 0.03 of its total potential returns per unit of risk. Regions Financial is currently generating about 0.04 per unit of volatility. If you would invest 1,694 in Regions Financial on January 26, 2024 and sell it today you would earn a total of 283.00 from holding Regions Financial or generate 16.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Brookline Bancorp vs. Regions Financial
Performance |
Timeline |
Brookline Bancorp |
Regions Financial |
Brookline Bancorp and Regions Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Brookline Bancorp and Regions Financial
The main advantage of trading using opposite Brookline Bancorp and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookline Bancorp 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.Brookline Bancorp vs. Heritage Commerce Corp | Brookline Bancorp vs. Cambridge Bancorp | Brookline Bancorp vs. Eastern Bankshares | Brookline Bancorp vs. HarborOne Bancorp |
Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. New York Community | Regions Financial vs. Zions Bancorporation |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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