Correlation Between Regional Management and Nuveen Variable
Can any of the company-specific risk be diversified away by investing in both Regional Management and Nuveen Variable 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 Nuveen Variable 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 Nuveen Variable Rate, you can compare the effects of market volatilities on Regional Management and Nuveen Variable 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 Nuveen Variable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Management and Nuveen Variable.
Diversification Opportunities for Regional Management and Nuveen Variable
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regional and Nuveen is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Regional Management Corp and Nuveen Variable Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Variable Rate 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 Nuveen Variable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Variable Rate has no effect on the direction of Regional Management i.e., Regional Management and Nuveen Variable go up and down completely randomly.
Pair Corralation between Regional Management and Nuveen Variable
Allowing for the 90-day total investment horizon Regional Management is expected to generate 1.73 times less return on investment than Nuveen Variable. In addition to that, Regional Management is 3.67 times more volatile than Nuveen Variable Rate. It trades about 0.02 of its total potential returns per unit of risk. Nuveen Variable Rate is currently generating about 0.13 per unit of volatility. If you would invest 1,382 in Nuveen Variable Rate on August 31, 2024 and sell it today you would earn a total of 547.00 from holding Nuveen Variable Rate or generate 39.58% 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. Nuveen Variable Rate
Performance |
| Timeline |
| Regional Management Corp |
| Nuveen Variable Rate |
Regional Management and Nuveen Variable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Management and Nuveen Variable
The main advantage of trading using opposite Regional Management and Nuveen Variable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Management position performs unexpectedly, Nuveen Variable 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 Nuveen Variable will offset losses from the drop in Nuveen Variable's long position.| Regional Management vs. SLM Corp Pb | Regional Management vs. FirstCash | Regional Management vs. Federal Agricultural Mortgage | Regional Management vs. Navient Corp |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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