Correlation Between Technology Telecommunicatio and Regional Management

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

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

Diversification Opportunities for Technology Telecommunicatio and Regional Management

-0.39

Correlation Coefficient

Technology Telecommunicatio  Regional Management

Very good diversification

The 3 months correlation between Technology and Regional is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Technology Telecommunication A 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 Technology Telecommunicatio 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 Technology Telecommunication Acquisition 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 Technology Telecommunicatio i.e., Technology Telecommunicatio and Regional Management go up and down completely randomly.

Pair Corralation between Technology Telecommunicatio and Regional Management

Assuming the 90 days horizon Technology Telecommunication Acquisition is expected to generate 0.3 times more return on investment than Regional Management. However, Technology Telecommunication Acquisition is 3.39 times less risky than Regional Management. It trades about -0.01 of its potential returns per unit of risk. Regional Management Corp is currently generating about -0.02 per unit of risk. If you would invest  1,220  in Technology Telecommunication Acquisition on September 1, 2024 and sell it today you would lose (5.00) from holding Technology Telecommunication Acquisition or give up 0.41% of portfolio value over 90 days.

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

Technology Telecommunication A  vs.  Regional Management Corp

Technology Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Technology Telecommunication Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Technology Telecommunicatio is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Technology Telecommunicatio and Regional Management

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

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.