Correlation Between Regional Management and Atlanticus Holdings
Can any of the company-specific risk be diversified away by investing in both Regional Management and Atlanticus Holdings 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 Regional Management and Atlanticus Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regional Management Corp and Atlanticus Holdings Corp, you can compare the effects of market volatilities on Regional Management and Atlanticus Holdings 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 Regional Management with a short position of Atlanticus Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Management and Atlanticus Holdings.
Diversification Opportunities for Regional Management and Atlanticus Holdings
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regional and Atlanticus is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Regional Management Corp and Atlanticus Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanticus Holdings Corp and Regional Management 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 Regional Management Corp are associated (or correlated) with Atlanticus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanticus Holdings Corp has no effect on the direction of Regional Management i.e., Regional Management and Atlanticus Holdings go up and down completely randomly.
Pair Corralation between Regional Management and Atlanticus Holdings
Allowing for the 90-day total investment horizon Regional Management Corp is expected to under-perform the Atlanticus Holdings. In addition to that, Regional Management is 4.11 times more volatile than Atlanticus Holdings Corp. It trades about -0.03 of its total potential returns per unit of risk. Atlanticus Holdings Corp is currently generating about 0.17 per unit of volatility. If you would invest 2,256 in Atlanticus Holdings Corp on August 30, 2024 and sell it today you would earn a total of 152.00 from holding Atlanticus Holdings Corp or generate 6.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regional Management Corp vs. Atlanticus Holdings Corp
Performance |
| Timeline |
| Regional Management Corp |
| Atlanticus Holdings Corp |
Regional Management and Atlanticus Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Management and Atlanticus Holdings
The main advantage of trading using opposite Regional Management and Atlanticus Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Management position performs unexpectedly, Atlanticus Holdings 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 Atlanticus Holdings will offset losses from the drop in Atlanticus Holdings' long position.| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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