Correlation Between OneSavings Bank and Cars
Can any of the company-specific risk be diversified away by investing in both OneSavings Bank and Cars 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 Cars 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 Cars Inc, you can compare the effects of market volatilities on OneSavings Bank and Cars 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 Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of OneSavings Bank and Cars.
Diversification Opportunities for OneSavings Bank and Cars
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between OneSavings and Cars is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding OneSavings Bank PLC and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc 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 Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of OneSavings Bank i.e., OneSavings Bank and Cars go up and down completely randomly.
Pair Corralation between OneSavings Bank and Cars
Assuming the 90 days trading horizon OneSavings Bank is expected to generate 4.66 times less return on investment than Cars. But when comparing it to its historical volatility, OneSavings Bank PLC is 2.14 times less risky than Cars. It trades about 0.05 of its potential returns per unit of risk. Cars Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,780 in Cars Inc on August 30, 2024 and sell it today you would earn a total of 187.00 from holding Cars Inc or generate 10.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 56.25% |
| Values | Daily Returns |
OneSavings Bank PLC vs. Cars Inc
Performance |
| Timeline |
| OneSavings Bank PLC |
| Cars Inc |
OneSavings Bank and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OneSavings Bank and Cars
The main advantage of trading using opposite OneSavings Bank and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OneSavings Bank position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.| OneSavings Bank vs. Toyota Motor Corp | OneSavings Bank vs. Neometals | OneSavings Bank vs. Coor Service Management | OneSavings Bank vs. JPMorgan ETFs ICAV |
| Cars vs. Lendinvest PLC | Cars vs. Neometals | Cars vs. Albion Technology General | Cars vs. Jupiter Fund 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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