Correlation Between Orix Corp and Oportun Financial

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

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

Diversification Opportunities for Orix Corp and Oportun Financial

-0.33

Correlation Coefficient

Orix Corp  Oportun Financial

Very good diversification

The 3 months correlation between Orix and Oportun is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Orix Corp Ads and Oportun Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oportun Financial Corp and Orix Corp 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 Orix Corp Ads are associated (or correlated) with Oportun Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oportun Financial Corp has no effect on the direction of Orix Corp i.e., Orix Corp and Oportun Financial go up and down completely randomly.

Pair Corralation between Orix Corp and Oportun Financial

Allowing for the 90-day total investment horizon Orix Corp is expected to generate 38.41 times less return on investment than Oportun Financial. But when comparing it to its historical volatility, Orix Corp Ads is 3.95 times less risky than Oportun Financial. It trades about 0.01 of its potential returns per unit of risk. Oportun Financial Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  407.00  in Oportun Financial Corp on December 27, 2024 and sell it today you would earn a total of  163.00  from holding Oportun Financial Corp or generate 40.05% return on investment over 90 days.

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

Orix Corp Ads  vs.  Oportun Financial Corp

Orix Corp Ads

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Orix Corp Ads are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Orix Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oportun Financial Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oportun Financial Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Oportun Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orix Corp and Oportun Financial

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

The idea behind Orix Corp Ads and Oportun Financial 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.

Check out your portfolio center.

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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.