Correlation Between Orix Corp and Finance Of

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

Diversification Opportunities for Orix Corp and Finance Of

-0.57

Correlation Coefficient

Orix Corp  Finance Of

Excellent diversification

The 3 months correlation between Orix and Finance is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Orix Corp Ads and Finance of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finance of America 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 Finance Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finance of America has no effect on the direction of Orix Corp i.e., Orix Corp and Finance Of go up and down completely randomly.

Pair Corralation between Orix Corp and Finance Of

Allowing for the 90-day total investment horizon Orix Corp Ads is expected to under-perform the Finance Of. But the stock apears to be less risky and, when comparing its historical volatility, Orix Corp Ads is 6.38 times less risky than Finance Of. The stock trades about -0.15 of its potential returns per unit of risk. The Finance of America is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  789.00  in Finance of America on August 31, 2024 and sell it today you would earn a total of  1,063  from holding Finance of America or generate 134.73% return on investment over 90 days.

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

Orix Corp Ads  vs.  Finance of America

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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Finance of America

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Finance of America are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Finance Of sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orix Corp and Finance Of

The main advantage of trading using opposite Orix Corp and Finance Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orix Corp position performs unexpectedly, Finance Of 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 Finance Of will offset losses from the drop in Finance Of's long position.

The idea behind Orix Corp Ads and Finance of America 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.