Correlation Between Regional Management and Sezzle Common

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

Diversification Opportunities for Regional Management and Sezzle Common

-0.43

Correlation Coefficient

Regional Management  Sezzle Common

Very good diversification

The 3 months correlation between Regional and Sezzle is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Regional Management Corp and Sezzle Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sezzle Common Stock 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 Sezzle Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sezzle Common Stock has no effect on the direction of Regional Management i.e., Regional Management and Sezzle Common go up and down completely randomly.

Pair Corralation between Regional Management and Sezzle Common

Allowing for the 90-day total investment horizon Regional Management is expected to generate 13.07 times less return on investment than Sezzle Common. But when comparing it to its historical volatility, Regional Management Corp is 3.11 times less risky than Sezzle Common. It trades about 0.04 of its potential returns per unit of risk. Sezzle Common Stock is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  7,768  in Sezzle Common Stock on August 30, 2024 and sell it today you would earn a total of  33,727  from holding Sezzle Common Stock or generate 434.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Regional Management Corp  vs.  Sezzle Common Stock

Regional Management Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regional Management Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Regional Management is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Sezzle Common Stock

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sezzle Common Stock are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Sezzle Common disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Regional Management and Sezzle Common

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

The idea behind Regional Management Corp and Sezzle Common Stock 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.