Correlation Between Cairn Homes and OneSavings Bank
Can any of the company-specific risk be diversified away by investing in both Cairn Homes and OneSavings Bank 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 Cairn Homes and OneSavings Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairn Homes PLC and OneSavings Bank PLC, you can compare the effects of market volatilities on Cairn Homes and OneSavings Bank 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 Cairn Homes with a short position of OneSavings Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairn Homes and OneSavings Bank.
Diversification Opportunities for Cairn Homes and OneSavings Bank
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cairn and OneSavings is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cairn Homes PLC and OneSavings Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSavings Bank PLC and Cairn Homes 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 Cairn Homes PLC are associated (or correlated) with OneSavings Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSavings Bank PLC has no effect on the direction of Cairn Homes i.e., Cairn Homes and OneSavings Bank go up and down completely randomly.
Pair Corralation between Cairn Homes and OneSavings Bank
Assuming the 90 days trading horizon Cairn Homes PLC is expected to under-perform the OneSavings Bank. But the stock apears to be less risky and, when comparing its historical volatility, Cairn Homes PLC is 1.02 times less risky than OneSavings Bank. The stock trades about -0.15 of its potential returns per unit of risk. The OneSavings Bank PLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 37,100 in OneSavings Bank PLC on August 29, 2024 and sell it today you would earn a total of 1,220 from holding OneSavings Bank PLC or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairn Homes PLC vs. OneSavings Bank PLC
Performance |
| Timeline |
| Cairn Homes PLC |
| OneSavings Bank PLC |
Cairn Homes and OneSavings Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairn Homes and OneSavings Bank
The main advantage of trading using opposite Cairn Homes and OneSavings Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairn Homes position performs unexpectedly, OneSavings Bank 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 OneSavings Bank will offset losses from the drop in OneSavings Bank's long position.| Cairn Homes vs. Ondine Biomedical | Cairn Homes vs. Europa Metals | Cairn Homes vs. Lendinvest PLC | Cairn Homes vs. Neometals |
| OneSavings Bank vs. Toyota Motor Corp | OneSavings Bank vs. Lendinvest PLC | OneSavings Bank vs. Neometals | OneSavings Bank vs. Coor Service Management |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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