Correlation Between Regional Management and Alta Global

Can any of the company-specific risk be diversified away by investing in both Regional Management and Alta Global 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 Alta Global 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 Alta Global Group, you can compare the effects of market volatilities on Regional Management and Alta Global 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 Alta Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Management and Alta Global.

Diversification Opportunities for Regional Management and Alta Global

-0.39

Correlation Coefficient

Regional Management  Alta Global

Very good diversification

The 3 months correlation between Regional and Alta is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Regional Management Corp and Alta Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Global Group 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 Alta Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Global Group has no effect on the direction of Regional Management i.e., Regional Management and Alta Global go up and down completely randomly.

Pair Corralation between Regional Management and Alta Global

Allowing for the 90-day total investment horizon Regional Management Corp is expected to generate 0.62 times more return on investment than Alta Global. However, Regional Management Corp is 1.62 times less risky than Alta Global. It trades about 0.23 of its potential returns per unit of risk. Alta Global Group is currently generating about -0.37 per unit of risk. If you would invest  3,003  in Regional Management Corp on September 23, 2024 and sell it today you would earn a total of  383.00  from holding Regional Management Corp or generate 12.75% 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.  Alta Global Group

Regional Management Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Regional Management Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal primary indicators, Regional Management may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Alta Global Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alta Global Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Regional Management and Alta Global

The main advantage of trading using opposite Regional Management and Alta Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Management position performs unexpectedly, Alta Global 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 Alta Global will offset losses from the drop in Alta Global's long position.

The idea behind Regional Management Corp and Alta Global Group 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.