Correlation Between FirstCash and Orix Corp
Can any of the company-specific risk be diversified away by investing in both FirstCash 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 FirstCash and Orix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FirstCash and Orix Corp Ads, you can compare the effects of market volatilities on FirstCash 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 FirstCash with a short position of Orix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstCash and Orix Corp.
Diversification Opportunities for FirstCash and Orix Corp
Very poor diversification
The 3 months correlation between FirstCash and Orix is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding FirstCash 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 FirstCash 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 FirstCash 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 FirstCash i.e., FirstCash and Orix Corp go up and down completely randomly.
Pair Corralation between FirstCash and Orix Corp
Given the investment horizon of 90 days FirstCash is expected to under-perform the Orix Corp. In addition to that, FirstCash is 1.04 times more volatile than Orix Corp Ads. It trades about -0.02 of its total potential returns per unit of risk. Orix Corp Ads is currently generating about 0.11 per unit of volatility. If you would invest 10,440 in Orix Corp Ads on August 26, 2024 and sell it today you would earn a total of 322.00 from holding Orix Corp Ads or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FirstCash vs. Orix Corp Ads
Performance |
| Timeline |
| FirstCash |
| Orix Corp Ads |
FirstCash and Orix Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FirstCash and Orix Corp
The main advantage of trading using opposite FirstCash and Orix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstCash 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.| FirstCash vs. World Acceptance | FirstCash vs. Enova International | FirstCash vs. Green Dot | FirstCash 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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