Correlation Between Open Lending and Regional Management
Can any of the company-specific risk be diversified away by investing in both Open Lending 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 Open Lending and Regional Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Open Lending Corp and Regional Management Corp, you can compare the effects of market volatilities on Open Lending 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 Open Lending with a short position of Regional Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Open Lending and Regional Management.
Diversification Opportunities for Open Lending and Regional Management
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Open and Regional is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Open Lending Corp 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 Open Lending 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 Open Lending Corp 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 Open Lending i.e., Open Lending and Regional Management go up and down completely randomly.
Pair Corralation between Open Lending and Regional Management
Given the investment horizon of 90 days Open Lending Corp is expected to generate 2.69 times more return on investment than Regional Management. However, Open Lending is 2.69 times more volatile than Regional Management Corp. It trades about -0.02 of its potential returns per unit of risk. Regional Management Corp is currently generating about -0.22 per unit of risk. If you would invest 525.00 in Open Lending Corp on November 28, 2024 and sell it today you would lose (21.00) from holding Open Lending Corp or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Open Lending Corp vs. Regional Management Corp
Performance |
| Timeline |
| Open Lending Corp |
| Regional Management Corp |
Open Lending and Regional Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Open Lending and Regional Management
The main advantage of trading using opposite Open Lending and Regional Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Open Lending 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.| Open Lending vs. EZCORP Inc | Open Lending vs. Orix Corp Ads | Open Lending vs. SLM Corp | Open Lending vs. Navient Corp |
| Regional Management vs. LM Funding America | Regional Management vs. Eason Technology Limited | Regional Management vs. Nisun International Enterprise | Regional Management vs. Qudian Inc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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