Correlation Between ORIX and Apple

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

By analyzing existing cross correlation between ORIX Corporation and Apple Inc, you can compare the effects of market volatilities on ORIX and Apple 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 with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX and Apple.

Diversification Opportunities for ORIX and Apple

0.03

Correlation Coefficient

ORIX  Apple

Significant diversification

The 3 months correlation between ORIX and Apple is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Corp. and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and ORIX 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 Corporation are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of ORIX i.e., ORIX and Apple go up and down completely randomly.

Pair Corralation between ORIX and Apple

Assuming the 90 days horizon ORIX Corporation is expected to under-perform the Apple. In addition to that, ORIX is 1.17 times more volatile than Apple Inc. It trades about -0.09 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.02 per unit of volatility. If you would invest  22,785  in Apple Inc on December 1, 2024 and sell it today you would earn a total of  245.00  from holding Apple Inc or generate 1.08% return on investment over 90 days.

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

ORIX Corp.  vs.  Apple Inc

ORIX

Risk-Adjusted Performance

Very Weak

Over the last 90 days ORIX Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Apple Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Apple is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ORIX and Apple

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

The idea behind ORIX Corporation and Apple Inc 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.