Correlation Between Orix Corp and Lendingtree
Can any of the company-specific risk be diversified away by investing in both Orix Corp and Lendingtree 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 Orix Corp and Lendingtree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orix Corp Ads and Lendingtree, you can compare the effects of market volatilities on Orix Corp and Lendingtree 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 Orix Corp with a short position of Lendingtree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orix Corp and Lendingtree.
Diversification Opportunities for Orix Corp and Lendingtree
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orix and Lendingtree is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Orix Corp Ads and Lendingtree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendingtree and Orix Corp 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 Orix Corp Ads are associated (or correlated) with Lendingtree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendingtree has no effect on the direction of Orix Corp i.e., Orix Corp and Lendingtree go up and down completely randomly.
Pair Corralation between Orix Corp and Lendingtree
Allowing for the 90-day total investment horizon Orix Corp is expected to generate 5.42 times less return on investment than Lendingtree. But when comparing it to its historical volatility, Orix Corp Ads is 3.06 times less risky than Lendingtree. It trades about 0.05 of its potential returns per unit of risk. Lendingtree is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,978 in Lendingtree on August 27, 2024 and sell it today you would earn a total of 2,421 from holding Lendingtree or generate 122.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orix Corp Ads vs. Lendingtree
Performance |
| Timeline |
| Orix Corp Ads |
| Lendingtree |
Orix Corp and Lendingtree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orix Corp and Lendingtree
The main advantage of trading using opposite Orix Corp and Lendingtree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orix Corp position performs unexpectedly, Lendingtree 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 Lendingtree will offset losses from the drop in Lendingtree's long position.| Orix Corp vs. Lendingtree | Orix Corp vs. Voya Financial | Orix Corp vs. B Riley Financial | Orix Corp vs. B Riley Financial |
| Lendingtree vs. Voya Financial | Lendingtree vs. B Riley Financial | Lendingtree vs. Voya Financial | Lendingtree 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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