Correlation Between OneSavings Bank and British American
Can any of the company-specific risk be diversified away by investing in both OneSavings Bank and British American 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 OneSavings Bank and British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OneSavings Bank PLC and British American Tobacco, you can compare the effects of market volatilities on OneSavings Bank and British American 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 OneSavings Bank with a short position of British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of OneSavings Bank and British American.
Diversification Opportunities for OneSavings Bank and British American
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between OneSavings and British is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding OneSavings Bank PLC and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco and OneSavings Bank 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 OneSavings Bank PLC are associated (or correlated) with British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of OneSavings Bank i.e., OneSavings Bank and British American go up and down completely randomly.
Pair Corralation between OneSavings Bank and British American
Assuming the 90 days trading horizon OneSavings Bank PLC is expected to under-perform the British American. In addition to that, OneSavings Bank is 1.72 times more volatile than British American Tobacco. It trades about -0.02 of its total potential returns per unit of risk. British American Tobacco is currently generating about 0.11 per unit of volatility. If you would invest 3,655 in British American Tobacco on August 30, 2024 and sell it today you would earn a total of 148.00 from holding British American Tobacco or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OneSavings Bank PLC vs. British American Tobacco
Performance |
| Timeline |
| OneSavings Bank PLC |
| British American Tobacco |
OneSavings Bank and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OneSavings Bank and British American
The main advantage of trading using opposite OneSavings Bank and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OneSavings Bank position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| OneSavings Bank vs. Chocoladefabriken Lindt Spruengli | OneSavings Bank vs. National Atomic Co | OneSavings Bank vs. OTP Bank Nyrt | OneSavings Bank vs. Samsung Electronics Co |
| British American vs. Tungsten West PLC | British American vs. Argo Group Limited | British American vs. Hardide PLC | British American vs. Versarien PLC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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