Correlation Between EZCORP and Roth CH

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

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

Diversification Opportunities for EZCORP and Roth CH

0.02

Correlation Coefficient

EZCORP  Roth CH

Significant diversification

The 3 months correlation between EZCORP and Roth is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding EZCORP Inc and Roth CH Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roth CH Acquisition 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 Roth CH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roth CH Acquisition has no effect on the direction of EZCORP i.e., EZCORP and Roth CH go up and down completely randomly.

Pair Corralation between EZCORP and Roth CH

Given the investment horizon of 90 days EZCORP Inc is expected to generate 0.04 times more return on investment than Roth CH. However, EZCORP Inc is 26.13 times less risky than Roth CH. It trades about 0.02 of its potential returns per unit of risk. Roth CH Acquisition is currently generating about -0.58 per unit of risk. If you would invest  1,211  in EZCORP Inc on October 10, 2024 and sell it today you would earn a total of  5.00  from holding EZCORP Inc or generate 0.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	15.0%
Values	Daily Returns

EZCORP Inc  vs.  Roth CH Acquisition

EZCORP Inc

Risk-Adjusted Performance

7 of 100

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 abnormal basic indicators, EZCORP may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Roth CH Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roth CH Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with EZCORP and Roth CH

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

The idea behind EZCORP Inc and Roth CH Acquisition 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.