Correlation Between Orix Corp and Enova International

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

Diversification Opportunities for Orix Corp and Enova International

-0.62

Correlation Coefficient

Orix Corp  Enova International

Excellent diversification

The 3 months correlation between Orix and Enova is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Orix Corp Ads and Enova International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enova International 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 Enova International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enova International has no effect on the direction of Orix Corp i.e., Orix Corp and Enova International go up and down completely randomly.

Pair Corralation between Orix Corp and Enova International

Allowing for the 90-day total investment horizon Orix Corp is expected to generate 11.83 times less return on investment than Enova International. But when comparing it to its historical volatility, Orix Corp Ads is 1.97 times less risky than Enova International. It trades about 0.05 of its potential returns per unit of risk. Enova International is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  8,812  in Enova International on August 31, 2024 and sell it today you would earn a total of  1,742  from holding Enova International or generate 19.77% return on investment over 90 days.

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

Orix Corp Ads  vs.  Enova International

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.

Enova International

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enova International are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Enova International sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orix Corp and Enova International

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

The idea behind Orix Corp Ads and Enova International 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.