Correlation Between OneSavings Bank and Bath Body
Can any of the company-specific risk be diversified away by investing in both OneSavings Bank and Bath Body 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 Bath Body 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 Bath Body Works, you can compare the effects of market volatilities on OneSavings Bank and Bath Body 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 Bath Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of OneSavings Bank and Bath Body.
Diversification Opportunities for OneSavings Bank and Bath Body
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OneSavings and Bath is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding OneSavings Bank PLC and Bath Body Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bath Body Works 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 Bath Body. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bath Body Works has no effect on the direction of OneSavings Bank i.e., OneSavings Bank and Bath Body go up and down completely randomly.
Pair Corralation between OneSavings Bank and Bath Body
Assuming the 90 days trading horizon OneSavings Bank PLC is expected to under-perform the Bath Body. But the stock apears to be less risky and, when comparing its historical volatility, OneSavings Bank PLC is 1.27 times less risky than Bath Body. The stock trades about -0.02 of its potential returns per unit of risk. The Bath Body Works is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,996 in Bath Body Works on September 24, 2024 and sell it today you would lose (54.00) from holding Bath Body Works or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OneSavings Bank PLC vs. Bath Body Works
Performance |
| Timeline |
| OneSavings Bank PLC |
| Bath Body Works |
OneSavings Bank and Bath Body Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OneSavings Bank and Bath Body
The main advantage of trading using opposite OneSavings Bank and Bath Body positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OneSavings Bank position performs unexpectedly, Bath Body 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 Bath Body will offset losses from the drop in Bath Body's long position.| OneSavings Bank vs. Gear4music Plc | OneSavings Bank vs. G5 Entertainment AB | OneSavings Bank vs. Catalyst Media Group | OneSavings Bank vs. Everyman Media Group |
| Bath Body vs. Uniper SE | Bath Body vs. Mulberry Group PLC | Bath Body vs. London Security Plc | Bath Body vs. Triad Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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