Correlation Between EZCORP and NICK Old

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

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

Diversification Opportunities for EZCORP and NICK Old

0.0

Correlation Coefficient

EZCORP  NICK Old

Pay attention - limited upside

The 3 months correlation between EZCORP and NICK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EZCORP Inc and NICK Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NICK Old 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 NICK Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NICK Old has no effect on the direction of EZCORP i.e., EZCORP and NICK Old go up and down completely randomly.

Pair Corralation between EZCORP and NICK Old

If you would invest  1,226  in EZCORP Inc on December 29, 2024 and sell it today you would earn a total of  242.00  from holding EZCORP Inc or generate 19.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

EZCORP Inc  vs.  NICK Old

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 abnormal basic indicators, EZCORP showed solid returns over the last few months and may actually be approaching a breakup point.

NICK Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days NICK Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, NICK Old is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with EZCORP and NICK Old

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

The idea behind EZCORP Inc and NICK Old 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.