Correlation Between Associated Capital and Orix Corp

Can any of the company-specific risk be diversified away by investing in both Associated Capital 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 Associated Capital and Orix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Associated Capital Group and Orix Corp Ads, you can compare the effects of market volatilities on Associated Capital 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 Associated Capital with a short position of Orix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Orix Corp.

Diversification Opportunities for Associated Capital and Orix Corp

-0.86

Correlation Coefficient

Associated Capital  Orix Corp

Pay attention - limited upside

The 3 months correlation between Associated and Orix is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group 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 Associated Capital 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 Associated Capital Group 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 Associated Capital i.e., Associated Capital and Orix Corp go up and down completely randomly.

Pair Corralation between Associated Capital and Orix Corp

Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 1.25 times more return on investment than Orix Corp. However, Associated Capital is 1.25 times more volatile than Orix Corp Ads. It trades about 0.12 of its potential returns per unit of risk. Orix Corp Ads is currently generating about -0.09 per unit of risk. If you would invest  3,143  in Associated Capital Group on September 3, 2024 and sell it today you would earn a total of  458.00  from holding Associated Capital Group or generate 14.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Associated Capital Group  vs.  Orix Corp Ads

Associated Capital

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Capital Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Associated Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Orix Corp Ads

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orix Corp Ads has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Associated Capital and Orix Corp

The main advantage of trading using opposite Associated Capital and Orix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital 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.

The idea behind Associated Capital Group and Orix Corp Ads 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.