Correlation Between NICK Old and Regional Management

Can any of the company-specific risk be diversified away by investing in both NICK Old 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 NICK Old and Regional Management into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NICK Old and Regional Management Corp, you can compare the effects of market volatilities on NICK Old 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 NICK Old with a short position of Regional Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICK Old and Regional Management.

Diversification Opportunities for NICK Old and Regional Management

0.0

Correlation Coefficient

NICK Old  Regional Management

Pay attention - limited upside

The 3 months correlation between NICK and Regional is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NICK Old 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 NICK Old 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 NICK Old 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 NICK Old i.e., NICK Old and Regional Management go up and down completely randomly.

Pair Corralation between NICK Old and Regional Management

If you would invest  3,071  in Regional Management Corp on December 1, 2024 and sell it today you would earn a total of  284.00  from holding Regional Management Corp or generate 9.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NICK Old  vs.  Regional Management Corp

NICK Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days NICK Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, NICK Old is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Regional Management Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Regional Management Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Regional Management may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NICK Old and Regional Management

The main advantage of trading using opposite NICK Old and Regional Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NICK Old 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.

The idea behind NICK Old and Regional Management Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.