Correlation Between Regional Management and Oppenheimer Holdings
Can any of the company-specific risk be diversified away by investing in both Regional Management and Oppenheimer 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 Oppenheimer 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 Oppenheimer Holdings, you can compare the effects of market volatilities on Regional Management and Oppenheimer 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 Oppenheimer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Management and Oppenheimer Holdings.
Diversification Opportunities for Regional Management and Oppenheimer Holdings
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regional and Oppenheimer is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Regional Management Corp and Oppenheimer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer 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 Oppenheimer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Holdings has no effect on the direction of Regional Management i.e., Regional Management and Oppenheimer Holdings go up and down completely randomly.
Pair Corralation between Regional Management and Oppenheimer Holdings
Allowing for the 90-day total investment horizon Regional Management is expected to generate 6.26 times less return on investment than Oppenheimer Holdings. But when comparing it to its historical volatility, Regional Management Corp is 1.0 times less risky than Oppenheimer Holdings. It trades about 0.06 of its potential returns per unit of risk. Oppenheimer Holdings is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 4,836 in Oppenheimer Holdings on August 25, 2024 and sell it today you would earn a total of 1,260 from holding Oppenheimer Holdings or generate 26.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Regional Management Corp vs. Oppenheimer Holdings
Performance |
| Timeline |
| Regional Management Corp |
| Oppenheimer Holdings |
Regional Management and Oppenheimer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Management and Oppenheimer Holdings
The main advantage of trading using opposite Regional Management and Oppenheimer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Management position performs unexpectedly, Oppenheimer 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 Oppenheimer Holdings will offset losses from the drop in Oppenheimer Holdings' long position.| Regional Management vs. SLM Corp Pb | Regional Management vs. FirstCash | Regional Management vs. Navient Corp | Regional Management vs. Orix Corp Ads |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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