Correlation Between Orix Corp and Elevate Credit

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Can any of the company-specific risk be diversified away by investing in both Orix Corp and Elevate Credit 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 Elevate Credit 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 Elevate Credit, you can compare the effects of market volatilities on Orix Corp and Elevate Credit 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 Elevate Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orix Corp and Elevate Credit.

Diversification Opportunities for Orix Corp and Elevate Credit

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Orix and Elevate is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Orix Corp Ads and Elevate Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevate Credit 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 Elevate Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevate Credit has no effect on the direction of Orix Corp i.e., Orix Corp and Elevate Credit go up and down completely randomly.

Pair Corralation between Orix Corp and Elevate Credit

If you would invest  10,509  in Orix Corp Ads on December 29, 2023 and sell it today you would earn a total of  517.00  from holding Orix Corp Ads or generate 4.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy4.55%
ValuesDaily Returns

Orix Corp Ads  vs.  Elevate Credit

 Performance 
       Timeline  
Orix Corp Ads 

Risk-Adjusted Performance

17 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Orix Corp Ads are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Orix Corp showed solid returns over the last few months and may actually be approaching a breakup point.
Elevate Credit 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Elevate Credit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Elevate Credit is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Orix Corp and Elevate Credit Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Orix Corp and Elevate Credit

The main advantage of trading using opposite Orix Corp and Elevate Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orix Corp position performs unexpectedly, Elevate Credit 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 Elevate Credit will offset losses from the drop in Elevate Credit's long position.
The idea behind Orix Corp Ads and Elevate Credit 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.
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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