Correlation Between OneSpaWorld Holdings and Vista Outdoor
Can any of the company-specific risk be diversified away by investing in both OneSpaWorld Holdings and Vista Outdoor 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 OneSpaWorld Holdings and Vista Outdoor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OneSpaWorld Holdings and Vista Outdoor, you can compare the effects of market volatilities on OneSpaWorld Holdings and Vista Outdoor 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 OneSpaWorld Holdings with a short position of Vista Outdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of OneSpaWorld Holdings and Vista Outdoor.
Diversification Opportunities for OneSpaWorld Holdings and Vista Outdoor
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OneSpaWorld and Vista is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding OneSpaWorld Holdings and Vista Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Outdoor and OneSpaWorld Holdings 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 OneSpaWorld Holdings are associated (or correlated) with Vista Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Outdoor has no effect on the direction of OneSpaWorld Holdings i.e., OneSpaWorld Holdings and Vista Outdoor go up and down completely randomly.
Pair Corralation between OneSpaWorld Holdings and Vista Outdoor
Considering the 90-day investment horizon OneSpaWorld Holdings is expected to generate 1.09 times less return on investment than Vista Outdoor. In addition to that, OneSpaWorld Holdings is 1.15 times more volatile than Vista Outdoor. It trades about 0.1 of its total potential returns per unit of risk. Vista Outdoor is currently generating about 0.13 per unit of volatility. If you would invest 2,956 in Vista Outdoor on November 3, 2024 and sell it today you would earn a total of 1,507 from holding Vista Outdoor or generate 50.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 82.66% |
| Values | Daily Returns |
OneSpaWorld Holdings vs. Vista Outdoor
Performance |
| Timeline |
| OneSpaWorld Holdings |
| Vista Outdoor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
OneSpaWorld Holdings and Vista Outdoor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OneSpaWorld Holdings and Vista Outdoor
The main advantage of trading using opposite OneSpaWorld Holdings and Vista Outdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OneSpaWorld Holdings position performs unexpectedly, Vista Outdoor 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 Vista Outdoor will offset losses from the drop in Vista Outdoor's long position.| OneSpaWorld Holdings vs. Escalade Incorporated | OneSpaWorld Holdings vs. Johnson Outdoors | OneSpaWorld Holdings vs. Clarus Corp | OneSpaWorld Holdings vs. Six Flags Entertainment |
| Vista Outdoor vs. Clarus Corp | Vista Outdoor vs. Johnson Outdoors | Vista Outdoor vs. Escalade Incorporated | Vista Outdoor vs. JAKKS Pacific |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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