Correlation Between FirstCash and Oportun Financial

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

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

Diversification Opportunities for FirstCash and Oportun Financial

-0.12

Correlation Coefficient

FirstCash  Oportun Financial

Good diversification

The 3 months correlation between FirstCash and Oportun is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding FirstCash 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 FirstCash 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 FirstCash 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 FirstCash i.e., FirstCash and Oportun Financial go up and down completely randomly.

Pair Corralation between FirstCash and Oportun Financial

Given the investment horizon of 90 days FirstCash is expected to generate 0.32 times more return on investment than Oportun Financial. However, FirstCash is 3.16 times less risky than Oportun Financial. It trades about 0.14 of its potential returns per unit of risk. Oportun Financial Corp is currently generating about 0.01 per unit of risk. If you would invest  11,148  in FirstCash on March 2, 2025 and sell it today you would earn a total of  1,643  from holding FirstCash or generate 14.74% return on investment over 90 days.

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

FirstCash  vs.  Oportun Financial Corp

FirstCash

Risk-Adjusted Performance

OK

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

Oportun Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oportun Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Oportun Financial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FirstCash and Oportun Financial

The main advantage of trading using opposite FirstCash and Oportun Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstCash 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 FirstCash 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.