Correlation Between OneSavings Bank and Canadian General
Can any of the company-specific risk be diversified away by investing in both OneSavings Bank and Canadian General 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 Canadian General 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 Canadian General Investments, you can compare the effects of market volatilities on OneSavings Bank and Canadian General 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 Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of OneSavings Bank and Canadian General.
Diversification Opportunities for OneSavings Bank and Canadian General
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OneSavings and Canadian is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding OneSavings Bank PLC and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv 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 Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of OneSavings Bank i.e., OneSavings Bank and Canadian General go up and down completely randomly.
Pair Corralation between OneSavings Bank and Canadian General
Assuming the 90 days trading horizon OneSavings Bank PLC is expected to generate 1.05 times more return on investment than Canadian General. However, OneSavings Bank is 1.05 times more volatile than Canadian General Investments. It trades about 0.07 of its potential returns per unit of risk. Canadian General Investments is currently generating about -0.05 per unit of risk. If you would invest 39,360 in OneSavings Bank PLC on November 7, 2024 and sell it today you would earn a total of 1,340 from holding OneSavings Bank PLC or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OneSavings Bank PLC vs. Canadian General Investments
Performance |
| Timeline |
| OneSavings Bank PLC |
| Canadian General Inv |
OneSavings Bank and Canadian General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OneSavings Bank and Canadian General
The main advantage of trading using opposite OneSavings Bank and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OneSavings Bank position performs unexpectedly, Canadian General 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 Canadian General will offset losses from the drop in Canadian General's long position.| OneSavings Bank vs. Home Depot | OneSavings Bank vs. Synthomer plc | OneSavings Bank vs. Cairo Communication SpA | OneSavings Bank vs. Gamma Communications PLC |
| Canadian General vs. Coeur Mining | Canadian General vs. Eastinco Mining Exploration | Canadian General vs. Silver Bullet Data | Canadian General vs. Tyson Foods Cl |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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