Correlation Between Regional Management and Open Lending
Can any of the company-specific risk be diversified away by investing in both Regional Management and Open Lending 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 Open Lending 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 Open Lending Corp, you can compare the effects of market volatilities on Regional Management and Open Lending 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 Open Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Management and Open Lending.
Diversification Opportunities for Regional Management and Open Lending
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regional and Open is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Regional Management Corp and Open Lending Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Open Lending 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 Open Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Open Lending Corp has no effect on the direction of Regional Management i.e., Regional Management and Open Lending go up and down completely randomly.
Pair Corralation between Regional Management and Open Lending
Allowing for the 90-day total investment horizon Regional Management Corp is expected to generate 0.8 times more return on investment than Open Lending. However, Regional Management Corp is 1.25 times less risky than Open Lending. It trades about 0.07 of its potential returns per unit of risk. Open Lending Corp is currently generating about 0.0 per unit of risk. If you would invest 2,464 in Regional Management Corp on November 9, 2024 and sell it today you would earn a total of 1,152 from holding Regional Management Corp or generate 46.75% 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. Open Lending Corp
Performance |
| Timeline |
| Regional Management Corp |
| Open Lending Corp |
Regional Management and Open Lending Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Management and Open Lending
The main advantage of trading using opposite Regional Management and Open Lending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Management position performs unexpectedly, Open Lending 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 Open Lending will offset losses from the drop in Open Lending's long position.| Regional Management vs. SLM Corp Pb | Regional Management vs. FirstCash | Regional Management vs. Federal Agricultural Mortgage | Regional Management vs. Navient Corp |
| Open Lending vs. EZCORP Inc | Open Lending vs. Orix Corp Ads | Open Lending vs. SLM Corp | Open Lending vs. Navient 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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