Correlation Between Regional Management and EZCORP
Can any of the company-specific risk be diversified away by investing in both Regional Management and EZCORP 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 EZCORP 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 EZCORP Inc, you can compare the effects of market volatilities on Regional Management and EZCORP 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 EZCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Management and EZCORP.
Diversification Opportunities for Regional Management and EZCORP
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regional and EZCORP is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Regional Management Corp and EZCORP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZCORP Inc 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 EZCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZCORP Inc has no effect on the direction of Regional Management i.e., Regional Management and EZCORP go up and down completely randomly.
Pair Corralation between Regional Management and EZCORP
Allowing for the 90-day total investment horizon Regional Management Corp is expected to generate 2.4 times more return on investment than EZCORP. However, Regional Management is 2.4 times more volatile than EZCORP Inc. It trades about 0.12 of its potential returns per unit of risk. EZCORP Inc is currently generating about 0.27 per unit of risk. If you would invest 2,866 in Regional Management Corp on August 30, 2024 and sell it today you would earn a total of 218.00 from holding Regional Management Corp or generate 7.61% 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. EZCORP Inc
Performance |
| Timeline |
| Regional Management Corp |
| EZCORP Inc |
Regional Management and EZCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Management and EZCORP
The main advantage of trading using opposite Regional Management and EZCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Management position performs unexpectedly, EZCORP 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 EZCORP will offset losses from the drop in EZCORP's long position.| Regional Management vs. 360 Finance | Regional Management vs. Atlanticus Holdings | Regional Management vs. X Financial Class | Regional Management vs. Yirendai |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |