Correlation Between ORIX and SEIKO EPSON

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

By analyzing existing cross correlation between ORIX Corporation and SEIKO EPSON PADR, you can compare the effects of market volatilities on ORIX and SEIKO EPSON 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 SEIKO EPSON. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX and SEIKO EPSON.

Diversification Opportunities for ORIX and SEIKO EPSON

-0.72

Correlation Coefficient

ORIX  SEIKO EPSON

Pay attention - limited upside

The 3 months correlation between ORIX and SEIKO is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Corp. and SEIKO EPSON PADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEIKO EPSON PADR 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 SEIKO EPSON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEIKO EPSON PADR has no effect on the direction of ORIX i.e., ORIX and SEIKO EPSON go up and down completely randomly.

Pair Corralation between ORIX and SEIKO EPSON

Assuming the 90 days horizon ORIX Corporation is expected to generate 0.79 times more return on investment than SEIKO EPSON. However, ORIX Corporation is 1.27 times less risky than SEIKO EPSON. It trades about 0.09 of its potential returns per unit of risk. SEIKO EPSON PADR is currently generating about -0.12 per unit of risk. If you would invest  1,760  in ORIX Corporation on April 24, 2025 and sell it today you would earn a total of  130.00  from holding ORIX Corporation or generate 7.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

ORIX Corp.  vs.  SEIKO EPSON PADR

ORIX

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ORIX Corporation are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ORIX may actually be approaching a critical reversion point that can send shares even higher in August 2025.

SEIKO EPSON PADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days SEIKO EPSON PADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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.

Pair Trading with ORIX and SEIKO EPSON

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

The idea behind ORIX Corporation and SEIKO EPSON PADR 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.