Correlation Between OneSavings Bank and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both OneSavings Bank and DFS Furniture 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 DFS Furniture 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 DFS Furniture PLC, you can compare the effects of market volatilities on OneSavings Bank and DFS Furniture 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 DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of OneSavings Bank and DFS Furniture.
Diversification Opportunities for OneSavings Bank and DFS Furniture
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OneSavings and DFS is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding OneSavings Bank PLC and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC 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 DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of OneSavings Bank i.e., OneSavings Bank and DFS Furniture go up and down completely randomly.
Pair Corralation between OneSavings Bank and DFS Furniture
Assuming the 90 days trading horizon OneSavings Bank PLC is expected to under-perform the DFS Furniture. In addition to that, OneSavings Bank is 1.17 times more volatile than DFS Furniture PLC. It trades about -0.02 of its total potential returns per unit of risk. DFS Furniture PLC is currently generating about 0.12 per unit of volatility. If you would invest 13,900 in DFS Furniture PLC on October 20, 2024 and sell it today you would earn a total of 600.00 from holding DFS Furniture PLC or generate 4.32% 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. DFS Furniture PLC
Performance |
| Timeline |
| OneSavings Bank PLC |
| DFS Furniture PLC |
OneSavings Bank and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OneSavings Bank and DFS Furniture
The main advantage of trading using opposite OneSavings Bank and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OneSavings Bank position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.| OneSavings Bank vs. DXC Technology Co | OneSavings Bank vs. Xeros Technology Group | OneSavings Bank vs. International Biotechnology Trust | OneSavings Bank vs. Allianz Technology Trust |
| DFS Furniture vs. International Biotechnology Trust | DFS Furniture vs. Manulife Financial Corp | DFS Furniture vs. Dairy Farm International | DFS Furniture vs. Sydbank |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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