Correlation Between SLM Corp and Regional Management
Can any of the company-specific risk be diversified away by investing in both SLM Corp and Regional Management 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 SLM Corp and Regional Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLM Corp and Regional Management Corp, you can compare the effects of market volatilities on SLM Corp and Regional Management 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 SLM Corp with a short position of Regional Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLM Corp and Regional Management.
Diversification Opportunities for SLM Corp and Regional Management
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SLM and Regional is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SLM Corp and Regional Management Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Management Corp and SLM Corp 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 SLM Corp are associated (or correlated) with Regional Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Management Corp has no effect on the direction of SLM Corp i.e., SLM Corp and Regional Management go up and down completely randomly.
Pair Corralation between SLM Corp and Regional Management
Considering the 90-day investment horizon SLM Corp is expected to generate 0.7 times more return on investment than Regional Management. However, SLM Corp is 1.42 times less risky than Regional Management. It trades about 0.14 of its potential returns per unit of risk. Regional Management Corp is currently generating about 0.06 per unit of risk. If you would invest 1,469 in SLM Corp on August 26, 2024 and sell it today you would earn a total of 1,244 from holding SLM Corp or generate 84.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLM Corp vs. Regional Management Corp
Performance |
| Timeline |
| SLM Corp |
| Regional Management Corp |
SLM Corp and Regional Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLM Corp and Regional Management
The main advantage of trading using opposite SLM Corp and Regional Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLM Corp position performs unexpectedly, Regional Management 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 Regional Management will offset losses from the drop in Regional Management's long position.| SLM Corp vs. Orix Corp Ads | SLM Corp vs. FirstCash | SLM Corp vs. Medallion Financial Corp | SLM Corp vs. Oportun Financial Corp |
| Regional Management vs. SLM Corp Pb | Regional Management vs. FirstCash | Regional Management vs. Navient Corp | Regional Management vs. Orix Corp Ads |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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