Correlation Between Orix Corp and WisdomTree

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

Diversification Opportunities for Orix Corp and WisdomTree

0.92

Correlation Coefficient

Orix Corp  WisdomTree

Almost no diversification

The 3 months correlation between Orix and WisdomTree is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Orix Corp Ads and WisdomTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree 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 WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree has no effect on the direction of Orix Corp i.e., Orix Corp and WisdomTree go up and down completely randomly.

Pair Corralation between Orix Corp and WisdomTree

Allowing for the 90-day total investment horizon Orix Corp Ads is expected to under-perform the WisdomTree. But the stock apears to be less risky and, when comparing its historical volatility, Orix Corp Ads is 1.05 times less risky than WisdomTree. The stock trades about -0.04 of its potential returns per unit of risk. The WisdomTree is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  1,225  in WisdomTree on May 3, 2025 and sell it today you would earn a total of  102.00  from holding WisdomTree or generate 8.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.45%
Values	Daily Returns

Orix Corp Ads  vs.  WisdomTree

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 September 2025.

WisdomTree

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, WisdomTree unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orix Corp and WisdomTree

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

The idea behind Orix Corp Ads and WisdomTree 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.