Correlation Between Regency Affiliates and Bowlin Travel

Can any of the company-specific risk be diversified away by investing in both Regency Affiliates and Bowlin Travel 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 Regency Affiliates and Bowlin Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Regency Affiliates and Bowlin Travel Centers, you can compare the effects of market volatilities on Regency Affiliates and Bowlin Travel 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 Regency Affiliates with a short position of Bowlin Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regency Affiliates and Bowlin Travel.

Diversification Opportunities for Regency Affiliates and Bowlin Travel

-0.09

Correlation Coefficient

Regency Affiliates  Bowlin Travel

Good diversification

The 3 months correlation between Regency and Bowlin is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Regency Affiliates and Bowlin Travel Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowlin Travel Centers and Regency Affiliates 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 Regency Affiliates are associated (or correlated) with Bowlin Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowlin Travel Centers has no effect on the direction of Regency Affiliates i.e., Regency Affiliates and Bowlin Travel go up and down completely randomly.

Pair Corralation between Regency Affiliates and Bowlin Travel

Given the investment horizon of 90 days Regency Affiliates is expected to generate 2.11 times less return on investment than Bowlin Travel. In addition to that, Regency Affiliates is 1.99 times more volatile than Bowlin Travel Centers. It trades about 0.04 of its total potential returns per unit of risk. Bowlin Travel Centers is currently generating about 0.18 per unit of volatility. If you would invest  351.00  in Bowlin Travel Centers on May 6, 2025 and sell it today you would earn a total of  74.00  from holding Bowlin Travel Centers or generate 21.08% return on investment over 90 days.

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

Regency Affiliates  vs.  Bowlin Travel Centers

Regency Affiliates

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Regency Affiliates are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical and fundamental indicators, Regency Affiliates may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Bowlin Travel Centers

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bowlin Travel Centers are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Bowlin Travel disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Regency Affiliates and Bowlin Travel

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

The idea behind Regency Affiliates and Bowlin Travel Centers 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.