Correlation Between Regional Management and Enova International
Can any of the company-specific risk be diversified away by investing in both Regional Management and Enova International 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 Enova International 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 Enova International, you can compare the effects of market volatilities on Regional Management and Enova International 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 Enova International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Management and Enova International.
Diversification Opportunities for Regional Management and Enova International
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regional and Enova is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Regional Management Corp and Enova International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enova International 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 Enova International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enova International has no effect on the direction of Regional Management i.e., Regional Management and Enova International go up and down completely randomly.
Pair Corralation between Regional Management and Enova International
Allowing for the 90-day total investment horizon Regional Management is expected to generate 2.23 times less return on investment than Enova International. In addition to that, Regional Management is 1.3 times more volatile than Enova International. It trades about 0.06 of its total potential returns per unit of risk. Enova International is currently generating about 0.19 per unit of volatility. 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 |
Regional Management Corp vs. Enova International
Performance |
| Timeline |
| Regional Management Corp |
| Enova International |
Regional Management and Enova International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Management and Enova International
The main advantage of trading using opposite Regional Management and Enova International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Management position performs unexpectedly, Enova International 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 Enova International will offset losses from the drop in Enova International's long position.| Regional Management vs. SLM Corp Pb | Regional Management vs. FirstCash | Regional Management vs. Navient Corp | Regional Management vs. Orix Corp Ads |
| Enova International vs. SLM Corp | Enova International vs. Orix Corp Ads | Enova International vs. FirstCash | Enova International vs. Medallion Financial Corp |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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