Correlation Between Regional Management and MarketAxess Holdings
Can any of the company-specific risk be diversified away by investing in both Regional Management and MarketAxess 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 MarketAxess 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 MarketAxess Holdings, you can compare the effects of market volatilities on Regional Management and MarketAxess 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 MarketAxess Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Management and MarketAxess Holdings.
Diversification Opportunities for Regional Management and MarketAxess Holdings
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Regional and MarketAxess is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Regional Management Corp and MarketAxess Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarketAxess Holdings 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 MarketAxess Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MarketAxess Holdings has no effect on the direction of Regional Management i.e., Regional Management and MarketAxess Holdings go up and down completely randomly.
Pair Corralation between Regional Management and MarketAxess Holdings
Allowing for the 90-day total investment horizon Regional Management Corp is expected to generate 2.49 times more return on investment than MarketAxess Holdings. However, Regional Management is 2.49 times more volatile than MarketAxess Holdings. It trades about 0.18 of its potential returns per unit of risk. MarketAxess Holdings is currently generating about -0.19 per unit of risk. If you would invest 3,294 in Regional Management Corp on October 20, 2024 and sell it today you would earn a total of 275.00 from holding Regional Management Corp or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regional Management Corp vs. MarketAxess Holdings
Performance |
| Timeline |
| Regional Management Corp |
| MarketAxess Holdings |
Regional Management and MarketAxess Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Management and MarketAxess Holdings
The main advantage of trading using opposite Regional Management and MarketAxess Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Management position performs unexpectedly, MarketAxess 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 MarketAxess Holdings will offset losses from the drop in MarketAxess Holdings' long position.| Regional Management vs. SLM Corp Pb | Regional Management vs. FirstCash | Regional Management vs. Federal Agricultural Mortgage | Regional Management vs. Navient Corp |
| MarketAxess Holdings vs. Interactive Brokers Group | MarketAxess Holdings vs. Evercore Partners | MarketAxess Holdings vs. PJT Partners | MarketAxess Holdings vs. LPL Financial Holdings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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