Correlation Between OneSavings Bank and Scottish American
Can any of the company-specific risk be diversified away by investing in both OneSavings Bank and Scottish American 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 Scottish American 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 Scottish American Investment, you can compare the effects of market volatilities on OneSavings Bank and Scottish American 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 Scottish American. Check out your portfolio center. Please also check ongoing floating volatility patterns of OneSavings Bank and Scottish American.
Diversification Opportunities for OneSavings Bank and Scottish American
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OneSavings and Scottish is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding OneSavings Bank PLC and Scottish American Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottish American 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 Scottish American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottish American has no effect on the direction of OneSavings Bank i.e., OneSavings Bank and Scottish American go up and down completely randomly.
Pair Corralation between OneSavings Bank and Scottish American
Assuming the 90 days trading horizon OneSavings Bank PLC is expected to generate 1.65 times more return on investment than Scottish American. However, OneSavings Bank is 1.65 times more volatile than Scottish American Investment. It trades about 0.37 of its potential returns per unit of risk. Scottish American Investment is currently generating about 0.17 per unit of risk. If you would invest 35,380 in OneSavings Bank PLC on September 1, 2024 and sell it today you would earn a total of 4,860 from holding OneSavings Bank PLC or generate 13.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OneSavings Bank PLC vs. Scottish American Investment
Performance |
| Timeline |
| OneSavings Bank PLC |
| Scottish American |
OneSavings Bank and Scottish American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OneSavings Bank and Scottish American
The main advantage of trading using opposite OneSavings Bank and Scottish American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OneSavings Bank position performs unexpectedly, Scottish American 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 Scottish American will offset losses from the drop in Scottish American's long position.| OneSavings Bank vs. Atalaya Mining | OneSavings Bank vs. Endeavour Mining Corp | OneSavings Bank vs. iShares Physical Silver | OneSavings Bank vs. Eastinco Mining Exploration |
| Scottish American vs. Toyota Motor Corp | Scottish American vs. SoftBank Group Corp | Scottish American vs. OTP Bank Nyrt | Scottish American vs. Las Vegas Sands |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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