Correlation Between Cannae Holdings and One Group

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Can any of the company-specific risk be diversified away by investing in both Cannae Holdings and One Group 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 Cannae Holdings and One Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannae Holdings and One Group Hospitality, you can compare the effects of market volatilities on Cannae Holdings and One Group 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 Cannae Holdings with a short position of One Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannae Holdings and One Group.

Diversification Opportunities for Cannae Holdings and One Group

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between Cannae and One is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cannae Holdings and One Group Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Group Hospitality and Cannae 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 Cannae Holdings are associated (or correlated) with One Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Group Hospitality has no effect on the direction of Cannae Holdings i.e., Cannae Holdings and One Group go up and down completely randomly.

Pair Corralation between Cannae Holdings and One Group

Given the investment horizon of 90 days Cannae Holdings is expected to generate 0.51 times more return on investment than One Group. However, Cannae Holdings is 1.96 times less risky than One Group. It trades about -0.01 of its potential returns per unit of risk. One Group Hospitality is currently generating about -0.03 per unit of risk. If you would invest  2,265  in Cannae Holdings on October 3, 2024 and sell it today you would lose (279.00) from holding Cannae Holdings or give up 12.32% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cannae Holdings  vs.  One Group Hospitality

 Performance 
       Timeline  
Cannae Holdings 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Cannae Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Cannae Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.
One Group Hospitality 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days One Group Hospitality has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Cannae Holdings and One Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cannae Holdings and One Group

The main advantage of trading using opposite Cannae Holdings and One Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannae Holdings position performs unexpectedly, One Group 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 One Group will offset losses from the drop in One Group's long position.
The idea behind Cannae Holdings and One Group Hospitality pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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