Correlation Between ORIX and Wizz Air

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

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

Diversification Opportunities for ORIX and Wizz Air

-0.65

Correlation Coefficient

ORIX  Wizz Air

Excellent diversification

The 3 months correlation between ORIX and Wizz is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Corp. and Wizz Air Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wizz Air Holdings 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 Wizz Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wizz Air Holdings has no effect on the direction of ORIX i.e., ORIX and Wizz Air go up and down completely randomly.

Pair Corralation between ORIX and Wizz Air

Assuming the 90 days horizon ORIX Corporation is expected to generate 0.29 times more return on investment than Wizz Air. However, ORIX Corporation is 3.49 times less risky than Wizz Air. It trades about 0.13 of its potential returns per unit of risk. Wizz Air Holdings is currently generating about -0.1 per unit of risk. If you would invest  1,720  in ORIX Corporation on April 22, 2025 and sell it today you would earn a total of  190.00  from holding ORIX Corporation or generate 11.05% return on investment over 90 days.

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

ORIX Corp.  vs.  Wizz Air Holdings

ORIX

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ORIX Corporation are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ORIX may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Wizz Air Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wizz Air Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ORIX and Wizz Air

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

The idea behind ORIX Corporation and Wizz Air Holdings 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.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.