Correlation Between EZCORP and World Acceptance
Can any of the company-specific risk be diversified away by investing in both EZCORP and World Acceptance 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 EZCORP and World Acceptance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EZCORP Inc and World Acceptance, you can compare the effects of market volatilities on EZCORP and World Acceptance 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 EZCORP with a short position of World Acceptance. Check out your portfolio center. Please also check ongoing floating volatility patterns of EZCORP and World Acceptance.
Diversification Opportunities for EZCORP and World Acceptance
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EZCORP and World is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding EZCORP Inc and World Acceptance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Acceptance and EZCORP 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 EZCORP Inc are associated (or correlated) with World Acceptance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Acceptance has no effect on the direction of EZCORP i.e., EZCORP and World Acceptance go up and down completely randomly.
Pair Corralation between EZCORP and World Acceptance
Given the investment horizon of 90 days EZCORP is expected to generate 4.08 times less return on investment than World Acceptance. But when comparing it to its historical volatility, EZCORP Inc is 1.14 times less risky than World Acceptance. It trades about 0.01 of its potential returns per unit of risk. World Acceptance is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 12,309 in World Acceptance on March 5, 2024 and sell it today you would earn a total of 540.00 from holding World Acceptance or generate 4.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
EZCORP Inc vs. World Acceptance
Performance |
Timeline |
EZCORP Inc |
World Acceptance |
EZCORP and World Acceptance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EZCORP and World Acceptance
The main advantage of trading using opposite EZCORP and World Acceptance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EZCORP position performs unexpectedly, World Acceptance 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 World Acceptance will offset losses from the drop in World Acceptance's long position.EZCORP vs. Visa Class A | EZCORP vs. Mastercard | EZCORP vs. Aquagold International | EZCORP vs. Thrivent High Yield |
World Acceptance vs. Visa Class A | World Acceptance vs. Mastercard | World Acceptance vs. Aquagold International | World Acceptance vs. Thrivent High Yield |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Transaction History View history of all your transactions and understand their impact on performance | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |