Correlation Between Enova International and Regional Management
Can any of the company-specific risk be diversified away by investing in both Enova International and Regional Management 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 Enova International and Regional Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enova International and Regional Management Corp, you can compare the effects of market volatilities on Enova International and Regional Management 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 Enova International with a short position of Regional Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enova International and Regional Management.
Diversification Opportunities for Enova International and Regional Management
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enova and Regional is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Enova International and Regional Management Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Management Corp and Enova International 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 Enova International are associated (or correlated) with Regional Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Management Corp has no effect on the direction of Enova International i.e., Enova International and Regional Management go up and down completely randomly.
Pair Corralation between Enova International and Regional Management
Given the investment horizon of 90 days Enova International is expected to generate 0.77 times more return on investment than Regional Management. However, Enova International is 1.3 times less risky than Regional Management. It trades about 0.19 of its potential returns per unit of risk. Regional Management Corp is currently generating about 0.06 per unit of risk. If you would invest 4,120 in Enova International on August 26, 2024 and sell it today you would earn a total of 6,354 from holding Enova International or generate 154.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enova International vs. Regional Management Corp
Performance |
| Timeline |
| Enova International |
| Regional Management Corp |
Enova International and Regional Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enova International and Regional Management
The main advantage of trading using opposite Enova International and Regional Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enova International position performs unexpectedly, Regional Management 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 Regional Management will offset losses from the drop in Regional Management's long position.| Enova International vs. SLM Corp | Enova International vs. Orix Corp Ads | Enova International vs. FirstCash | Enova International vs. Medallion Financial Corp |
| Regional Management vs. SLM Corp Pb | Regional Management vs. FirstCash | Regional Management vs. Navient Corp | Regional Management vs. Orix Corp Ads |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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