Correlation Between Orix Corp and SLR Investment

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

Diversification Opportunities for Orix Corp and SLR Investment

0.72

Correlation Coefficient

Orix Corp  SLR Investment

Poor diversification

The 3 months correlation between Orix and SLR is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Orix Corp Ads and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of Orix Corp i.e., Orix Corp and SLR Investment go up and down completely randomly.

Pair Corralation between Orix Corp and SLR Investment

Allowing for the 90-day total investment horizon Orix Corp Ads is expected to generate 1.39 times more return on investment than SLR Investment. However, Orix Corp is 1.39 times more volatile than SLR Investment Corp. It trades about 0.16 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.09 per unit of risk. If you would invest  2,012  in Orix Corp Ads on May 2, 2025 and sell it today you would earn a total of  240.00  from holding Orix Corp Ads or generate 11.93% return on investment over 90 days.

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

Orix Corp Ads  vs.  SLR Investment Corp

Orix Corp Ads

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orix Corp Ads are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Orix Corp may actually be approaching a critical reversion point that can send shares even higher in August 2025.

SLR Investment Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SLR Investment Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SLR Investment is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Orix Corp and SLR Investment

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

The idea behind Orix Corp Ads and SLR Investment Corp 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.