Correlation Between Orix Corp and Runway Growth

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

Diversification Opportunities for Orix Corp and Runway Growth

-0.18

Correlation Coefficient

Orix Corp  Runway Growth

Good diversification

The 3 months correlation between Orix and Runway is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Orix Corp Ads and Runway Growth Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Runway Growth Finance 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 Runway Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Runway Growth Finance has no effect on the direction of Orix Corp i.e., Orix Corp and Runway Growth go up and down completely randomly.

Pair Corralation between Orix Corp and Runway Growth

Allowing for the 90-day total investment horizon Orix Corp Ads is expected to under-perform the Runway Growth. In addition to that, Orix Corp is 1.35 times more volatile than Runway Growth Finance. It trades about -0.11 of its total potential returns per unit of risk. Runway Growth Finance is currently generating about 0.12 per unit of volatility. If you would invest  1,001  in Runway Growth Finance on September 16, 2024 and sell it today you would earn a total of  90.00  from holding Runway Growth Finance or generate 8.99% return on investment over 90 days.

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

Orix Corp Ads  vs.  Runway Growth Finance

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 weak 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.

Runway Growth Finance

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Runway Growth Finance are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Runway Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Orix Corp and Runway Growth

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

The idea behind Orix Corp Ads and Runway Growth Finance 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.