Correlation Between Bread Financial and Orix Corp
Can any of the company-specific risk be diversified away by investing in both Bread Financial and Orix Corp 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 Bread Financial and Orix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bread Financial Holdings and Orix Corp Ads, you can compare the effects of market volatilities on Bread Financial and Orix Corp 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 Bread Financial with a short position of Orix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bread Financial and Orix Corp.
Diversification Opportunities for Bread Financial and Orix Corp
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bread and Orix is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bread Financial Holdings and Orix Corp Ads in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orix Corp Ads and Bread Financial 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 Bread Financial Holdings are associated (or correlated) with Orix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orix Corp Ads has no effect on the direction of Bread Financial i.e., Bread Financial and Orix Corp go up and down completely randomly.
Pair Corralation between Bread Financial and Orix Corp
Considering the 90-day investment horizon Bread Financial Holdings is expected to generate 3.44 times more return on investment than Orix Corp. However, Bread Financial is 3.44 times more volatile than Orix Corp Ads. It trades about 0.18 of its potential returns per unit of risk. Orix Corp Ads is currently generating about 0.11 per unit of risk. If you would invest 4,921 in Bread Financial Holdings on August 26, 2024 and sell it today you would earn a total of 886.00 from holding Bread Financial Holdings or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bread Financial Holdings vs. Orix Corp Ads
Performance |
| Timeline |
| Bread Financial Holdings |
| Orix Corp Ads |
Bread Financial and Orix Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bread Financial and Orix Corp
The main advantage of trading using opposite Bread Financial and Orix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bread Financial position performs unexpectedly, Orix Corp 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 Orix Corp will offset losses from the drop in Orix Corp's long position.| Bread Financial vs. SLM Corp | Bread Financial vs. Orix Corp Ads | Bread Financial vs. FirstCash | Bread Financial vs. Medallion Financial Corp |
| Orix Corp vs. Lendingtree | Orix Corp vs. Voya Financial | Orix Corp vs. B Riley Financial | Orix Corp vs. B Riley Financial |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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