Correlation Between Regional Management and Bayview Acquisition
Can any of the company-specific risk be diversified away by investing in both Regional Management and Bayview Acquisition 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 Bayview Acquisition 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 Bayview Acquisition Corp, you can compare the effects of market volatilities on Regional Management and Bayview Acquisition 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 Bayview Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Management and Bayview Acquisition.
Diversification Opportunities for Regional Management and Bayview Acquisition
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Regional and Bayview is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Regional Management Corp and Bayview Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayview Acquisition 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 Bayview Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayview Acquisition Corp has no effect on the direction of Regional Management i.e., Regional Management and Bayview Acquisition go up and down completely randomly.
Pair Corralation between Regional Management and Bayview Acquisition
Allowing for the 90-day total investment horizon Regional Management Corp is expected to generate 39.2 times more return on investment than Bayview Acquisition. However, Regional Management is 39.2 times more volatile than Bayview Acquisition Corp. It trades about 0.12 of its potential returns per unit of risk. Bayview Acquisition Corp is currently generating about 0.11 per unit of risk. If you would invest 2,843 in Regional Management Corp on September 1, 2024 and sell it today you would earn a total of 210.00 from holding Regional Management Corp or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regional Management Corp vs. Bayview Acquisition Corp
Performance |
| Timeline |
| Regional Management Corp |
| Bayview Acquisition Corp |
Regional Management and Bayview Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Management and Bayview Acquisition
The main advantage of trading using opposite Regional Management and Bayview Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Management position performs unexpectedly, Bayview Acquisition 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 Bayview Acquisition will offset losses from the drop in Bayview Acquisition's long position.| Regional Management vs. 360 Finance | Regional Management vs. Atlanticus Holdings | Regional Management vs. Qudian Inc | Regional Management vs. Enova International |
| Bayview Acquisition vs. Visa Class A | Bayview Acquisition vs. Diamond Hill Investment | Bayview Acquisition vs. Distoken Acquisition | Bayview Acquisition vs. AllianceBernstein Holding LP |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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