Correlation Between Regions Financial and PEPKOR

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

By analyzing existing cross correlation between Regions Financial and PEPKOR LTD, you can compare the effects of market volatilities on Regions Financial and PEPKOR 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 PEPKOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and PEPKOR.

Diversification Opportunities for Regions Financial and PEPKOR

0.4

Correlation Coefficient

Regions Financial  PEPKOR

Very weak diversification

The 3 months correlation between Regions and PEPKOR is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and PEPKOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPKOR LTD 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 PEPKOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPKOR LTD has no effect on the direction of Regions Financial i.e., Regions Financial and PEPKOR go up and down completely randomly.

Pair Corralation between Regions Financial and PEPKOR

Assuming the 90 days horizon Regions Financial is expected to generate 1.0 times more return on investment than PEPKOR. However, Regions Financial is 1.0 times less risky than PEPKOR. It trades about 0.24 of its potential returns per unit of risk. PEPKOR LTD is currently generating about 0.04 per unit of risk. If you would invest  1,730  in Regions Financial on April 24, 2025 and sell it today you would earn a total of  490.00  from holding Regions Financial or generate 28.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Regions Financial  vs.  PEPKOR LTD

Regions Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Regions Financial are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Regions Financial reported solid returns over the last few months and may actually be approaching a breakup point.

PEPKOR LTD

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PEPKOR LTD are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, PEPKOR is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Regions Financial and PEPKOR

The main advantage of trading using opposite Regions Financial and PEPKOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial position performs unexpectedly, PEPKOR 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 PEPKOR will offset losses from the drop in PEPKOR's long position.

The idea behind Regions Financial and PEPKOR LTD 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.