Correlation Between Regions Financial and Bank of Marin
Can any of the company-specific risk be diversified away by investing in both Regions Financial and Bank of Marin 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 Bank of Marin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Bank of Marin, you can compare the effects of market volatilities on Regions Financial and Bank of Marin 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 Bank of Marin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Bank of Marin.
Diversification Opportunities for Regions Financial and Bank of Marin
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Regions and Bank is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Bank of Marin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Marin 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 Bank of Marin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Marin has no effect on the direction of Regions Financial i.e., Regions Financial and Bank of Marin go up and down completely randomly.
Pair Corralation between Regions Financial and Bank of Marin
Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.71 times more return on investment than Bank of Marin. However, Regions Financial is 1.4 times less risky than Bank of Marin. It trades about -0.03 of its potential returns per unit of risk. Bank of Marin is currently generating about -0.09 per unit of risk. If you would invest 1,931 in Regions Financial on March 7, 2024 and sell it today you would lose (65.00) from holding Regions Financial or give up 3.37% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.41% |
Values | Daily Returns |
Regions Financial vs. Bank of Marin
Performance |
Timeline |
Regions Financial |
Bank of Marin |
Regions Financial and Bank of Marin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Regions Financial and Bank of Marin
The main advantage of trading using opposite Regions Financial and Bank of Marin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, Bank of Marin 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 Bank of Marin will offset losses from the drop in Bank of Marin's long position.Regions Financial vs. KeyCorp | Regions Financial vs. Fifth Third Bancorp | Regions Financial vs. New York Community | Regions Financial vs. Zions Bancorporation |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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