Correlation Between EZCORP and Atlanticus Holdings

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

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

Diversification Opportunities for EZCORP and Atlanticus Holdings

0.6

Correlation Coefficient

EZCORP  Atlanticus Holdings

Poor diversification

The 3 months correlation between EZCORP and Atlanticus is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding EZCORP Inc and Atlanticus Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanticus Holdings Corp and EZCORP 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 EZCORP Inc are associated (or correlated) with Atlanticus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanticus Holdings Corp has no effect on the direction of EZCORP i.e., EZCORP and Atlanticus Holdings go up and down completely randomly.

Pair Corralation between EZCORP and Atlanticus Holdings

Given the investment horizon of 90 days EZCORP Inc is expected to under-perform the Atlanticus Holdings. In addition to that, EZCORP is 2.93 times more volatile than Atlanticus Holdings Corp. It trades about -0.04 of its total potential returns per unit of risk. Atlanticus Holdings Corp is currently generating about -0.08 per unit of volatility. If you would invest  2,341  in Atlanticus Holdings Corp on December 10, 2024 and sell it today you would lose (23.00) from holding Atlanticus Holdings Corp or give up 0.98% of portfolio value over 90 days.

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

EZCORP Inc  vs.  Atlanticus Holdings Corp

EZCORP Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EZCORP Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, EZCORP may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Atlanticus Holdings Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atlanticus Holdings Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Atlanticus Holdings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with EZCORP and Atlanticus Holdings

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

The idea behind EZCORP Inc and Atlanticus Holdings 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 Transaction History module to view history of all your transactions and understand their impact on performance.