Correlation Between EZCORP and Regional Management
Can any of the company-specific risk be diversified away by investing in both EZCORP 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 EZCORP and Regional Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EZCORP Inc and Regional Management Corp, you can compare the effects of market volatilities on EZCORP 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 EZCORP with a short position of Regional Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of EZCORP and Regional Management.
Diversification Opportunities for EZCORP and Regional Management
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EZCORP and Regional is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding EZCORP Inc 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 EZCORP 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 EZCORP Inc 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 EZCORP i.e., EZCORP and Regional Management go up and down completely randomly.
Pair Corralation between EZCORP and Regional Management
Given the investment horizon of 90 days EZCORP Inc is expected to generate 0.74 times more return on investment than Regional Management. However, EZCORP Inc is 1.34 times less risky than Regional Management. It trades about 0.03 of its potential returns per unit of risk. Regional Management Corp is currently generating about 0.02 per unit of risk. If you would invest 1,056 in EZCORP Inc on August 27, 2024 and sell it today you would earn a total of 204.00 from holding EZCORP Inc or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EZCORP Inc vs. Regional Management Corp
Performance |
| Timeline |
| EZCORP Inc |
| Regional Management Corp |
EZCORP and Regional Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EZCORP and Regional Management
The main advantage of trading using opposite EZCORP and Regional Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EZCORP 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.The idea behind EZCORP Inc and Regional Management Corp 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.| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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