Correlation Between ACI Worldwide and OneSpan
Can any of the company-specific risk be diversified away by investing in both ACI Worldwide and OneSpan 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 ACI Worldwide and OneSpan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACI Worldwide and OneSpan, you can compare the effects of market volatilities on ACI Worldwide and OneSpan 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 ACI Worldwide with a short position of OneSpan. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACI Worldwide and OneSpan.
Diversification Opportunities for ACI Worldwide and OneSpan
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ACI and OneSpan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding ACI Worldwide and OneSpan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpan and ACI Worldwide 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 ACI Worldwide are associated (or correlated) with OneSpan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSpan has no effect on the direction of ACI Worldwide i.e., ACI Worldwide and OneSpan go up and down completely randomly.
Pair Corralation between ACI Worldwide and OneSpan
Given the investment horizon of 90 days ACI Worldwide is expected to generate 0.79 times more return on investment than OneSpan. However, ACI Worldwide is 1.26 times less risky than OneSpan. It trades about 0.22 of its potential returns per unit of risk. OneSpan is currently generating about 0.13 per unit of risk. If you would invest 3,490 in ACI Worldwide on August 28, 2024 and sell it today you would earn a total of 2,341 from holding ACI Worldwide or generate 67.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACI Worldwide vs. OneSpan
Performance |
| Timeline |
| ACI Worldwide |
| OneSpan |
ACI Worldwide and OneSpan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACI Worldwide and OneSpan
The main advantage of trading using opposite ACI Worldwide and OneSpan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACI Worldwide position performs unexpectedly, OneSpan 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 OneSpan will offset losses from the drop in OneSpan's long position.| ACI Worldwide vs. GigaCloud Technology Class | ACI Worldwide vs. Arqit Quantum | ACI Worldwide vs. Telos Corp | ACI Worldwide vs. Cemtrex |
| OneSpan vs. GigaCloud Technology Class | OneSpan vs. Arqit Quantum | OneSpan vs. Cemtrex | OneSpan vs. Paysafe |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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