Correlation Between OneSavings Bank and Indutrade
Can any of the company-specific risk be diversified away by investing in both OneSavings Bank and Indutrade 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 Indutrade 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 Indutrade AB, you can compare the effects of market volatilities on OneSavings Bank and Indutrade 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 Indutrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of OneSavings Bank and Indutrade.
Diversification Opportunities for OneSavings Bank and Indutrade
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between OneSavings and Indutrade is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding OneSavings Bank PLC and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade AB 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 Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of OneSavings Bank i.e., OneSavings Bank and Indutrade go up and down completely randomly.
Pair Corralation between OneSavings Bank and Indutrade
Assuming the 90 days trading horizon OneSavings Bank PLC is expected to generate 1.15 times more return on investment than Indutrade. However, OneSavings Bank is 1.15 times more volatile than Indutrade AB. It trades about -0.02 of its potential returns per unit of risk. Indutrade AB is currently generating about -0.24 per unit of risk. If you would invest 38,900 in OneSavings Bank PLC on August 30, 2024 and sell it today you would lose (580.00) from holding OneSavings Bank PLC or give up 1.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OneSavings Bank PLC vs. Indutrade AB
Performance |
| Timeline |
| OneSavings Bank PLC |
| Indutrade AB |
OneSavings Bank and Indutrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OneSavings Bank and Indutrade
The main advantage of trading using opposite OneSavings Bank and Indutrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OneSavings Bank position performs unexpectedly, Indutrade 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 Indutrade will offset losses from the drop in Indutrade'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 |
| Indutrade vs. Tungsten West PLC | Indutrade vs. Argo Group Limited | Indutrade vs. Hardide PLC | Indutrade 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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