Correlation Between EZCORP and Open Lending

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

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

Diversification Opportunities for EZCORP and Open Lending

-0.24

Correlation Coefficient

EZCORP  Open Lending

Very good diversification

The 3 months correlation between EZCORP and Open is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding EZCORP Inc and Open Lending Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Open Lending 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 Open Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Open Lending Corp has no effect on the direction of EZCORP i.e., EZCORP and Open Lending go up and down completely randomly.

Pair Corralation between EZCORP and Open Lending

Given the investment horizon of 90 days EZCORP Inc is expected to generate 0.9 times more return on investment than Open Lending. However, EZCORP Inc is 1.11 times less risky than Open Lending. It trades about 0.28 of its potential returns per unit of risk. Open Lending Corp is currently generating about -0.36 per unit of risk. If you would invest  1,201  in EZCORP Inc on December 2, 2024 and sell it today you would earn a total of  175.00  from holding EZCORP Inc or generate 14.57% return on investment over 90 days.

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

EZCORP Inc  vs.  Open Lending Corp

EZCORP Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EZCORP Inc are ranked lower than 6 (%) 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.

Open Lending Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Open Lending Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with EZCORP and Open Lending

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

The idea behind EZCORP Inc and Open Lending 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.