Correlation Between Wintrust Financial and Orix Corp

Can any of the company-specific risk be diversified away by investing in both Wintrust Financial and Orix Corp 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 Wintrust Financial and Orix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wintrust Financial Corp and Orix Corp Ads, you can compare the effects of market volatilities on Wintrust Financial and Orix Corp 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 Wintrust Financial with a short position of Orix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintrust Financial and Orix Corp.

Diversification Opportunities for Wintrust Financial and Orix Corp

0.35

Correlation Coefficient

Wintrust Financial  Orix Corp

Weak diversification

The 3 months correlation between Wintrust and Orix is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Wintrust Financial Corp and Orix Corp Ads in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orix Corp Ads and Wintrust Financial 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 Wintrust Financial Corp are associated (or correlated) with Orix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orix Corp Ads has no effect on the direction of Wintrust Financial i.e., Wintrust Financial and Orix Corp go up and down completely randomly.

Pair Corralation between Wintrust Financial and Orix Corp

Assuming the 90 days horizon Wintrust Financial is expected to generate 7.59 times less return on investment than Orix Corp. But when comparing it to its historical volatility, Wintrust Financial Corp is 11.12 times less risky than Orix Corp. It trades about 0.3 of its potential returns per unit of risk. Orix Corp Ads is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  2,000  in Orix Corp Ads on April 25, 2025 and sell it today you would earn a total of  318.00  from holding Orix Corp Ads or generate 15.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	88.71%
Values	Daily Returns

Wintrust Financial Corp  vs.  Orix Corp Ads

Wintrust Financial Corp

Risk-Adjusted Performance

Solid

Over the last 90 days Wintrust Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Wintrust Financial is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Orix Corp Ads

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Orix Corp Ads are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Orix Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wintrust Financial and Orix Corp

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

The idea behind Wintrust Financial Corp and Orix Corp Ads 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.