Correlation Between EZCORP and Arlington Asset
Can any of the company-specific risk be diversified away by investing in both EZCORP and Arlington Asset 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 Arlington Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EZCORP Inc and Arlington Asset Investment, you can compare the effects of market volatilities on EZCORP and Arlington Asset 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 Arlington Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of EZCORP and Arlington Asset.
Diversification Opportunities for EZCORP and Arlington Asset
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EZCORP and Arlington is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding EZCORP Inc and Arlington Asset Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arlington Asset Inve 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 Arlington Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arlington Asset Inve has no effect on the direction of EZCORP i.e., EZCORP and Arlington Asset go up and down completely randomly.
Pair Corralation between EZCORP and Arlington Asset
If you would invest 1,108 in EZCORP Inc on January 26, 2024 and sell it today you would earn a total of 42.00 from holding EZCORP Inc or generate 3.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 4.76% |
Values | Daily Returns |
EZCORP Inc vs. Arlington Asset Investment
Performance |
Timeline |
EZCORP Inc |
Arlington Asset Inve |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EZCORP and Arlington Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EZCORP and Arlington Asset
The main advantage of trading using opposite EZCORP and Arlington Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EZCORP position performs unexpectedly, Arlington Asset 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 Arlington Asset will offset losses from the drop in Arlington Asset's long position.EZCORP vs. World Acceptance | EZCORP vs. Enova International | EZCORP vs. Green Dot | EZCORP vs. Medallion Financial Corp |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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