Correlation Between Enova International and Orix Corp
Can any of the company-specific risk be diversified away by investing in both Enova International 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 Enova International and Orix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enova International and Orix Corp Ads, you can compare the effects of market volatilities on Enova International 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 Enova International with a short position of Orix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enova International and Orix Corp.
Diversification Opportunities for Enova International and Orix Corp
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Enova and Orix is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Enova International 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 Enova International 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 Enova International 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 Enova International i.e., Enova International and Orix Corp go up and down completely randomly.
Pair Corralation between Enova International and Orix Corp
Given the investment horizon of 90 days Enova International is expected to generate 1.46 times more return on investment than Orix Corp. However, Enova International is 1.46 times more volatile than Orix Corp Ads. It trades about 0.33 of its potential returns per unit of risk. Orix Corp Ads is currently generating about -0.05 per unit of risk. If you would invest 9,499 in Enova International on October 20, 2024 and sell it today you would earn a total of 1,263 from holding Enova International or generate 13.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enova International vs. Orix Corp Ads
Performance |
| Timeline |
| Enova International |
| Orix Corp Ads |
Enova International and Orix Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enova International and Orix Corp
The main advantage of trading using opposite Enova International and Orix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enova International 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.| Enova International vs. Regional Management Corp | Enova International vs. Encore Capital Group | Enova International vs. Customers Bancorp | Enova International vs. Employers Holdings |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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