Correlation Between EZCORP and CaliberCos

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

By analyzing existing cross correlation between EZCORP Inc and CaliberCos Class A, you can compare the effects of market volatilities on EZCORP and CaliberCos 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 CaliberCos. Check out your portfolio center. Please also check ongoing floating volatility patterns of EZCORP and CaliberCos.

Diversification Opportunities for EZCORP and CaliberCos

0.07

Correlation Coefficient

EZCORP  CaliberCos

Significant diversification

The 3 months correlation between EZCORP and CaliberCos is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding EZCORP Inc and CaliberCos Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaliberCos Class A 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 CaliberCos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaliberCos Class A has no effect on the direction of EZCORP i.e., EZCORP and CaliberCos go up and down completely randomly.

Pair Corralation between EZCORP and CaliberCos

Given the investment horizon of 90 days EZCORP is expected to generate 1.68 times less return on investment than CaliberCos. But when comparing it to its historical volatility, EZCORP Inc is 3.08 times less risky than CaliberCos. It trades about 0.16 of its potential returns per unit of risk. CaliberCos Class A is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  53.00  in CaliberCos Class A on December 21, 2024 and sell it today you would earn a total of  12.00  from holding CaliberCos Class A or generate 22.64% return on investment over 90 days.

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

EZCORP Inc  vs.  CaliberCos Class A

EZCORP Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EZCORP Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, EZCORP showed solid returns over the last few months and may actually be approaching a breakup point.

CaliberCos Class A

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CaliberCos Class A are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, CaliberCos exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EZCORP and CaliberCos

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

The idea behind EZCORP Inc and CaliberCos Class A 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.