Correlation Between Acushnet Holdings and OneSpaWorld Holdings

Can any of the company-specific risk be diversified away by investing in both Acushnet Holdings and OneSpaWorld Holdings 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 Acushnet Holdings and OneSpaWorld Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Acushnet Holdings Corp and OneSpaWorld Holdings, you can compare the effects of market volatilities on Acushnet Holdings and OneSpaWorld Holdings 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 Acushnet Holdings with a short position of OneSpaWorld Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acushnet Holdings and OneSpaWorld Holdings.

Diversification Opportunities for Acushnet Holdings and OneSpaWorld Holdings

-0.64

Correlation Coefficient

Acushnet Holdings  OneSpaWorld Holdings

Excellent diversification

The 3 months correlation between Acushnet and OneSpaWorld is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Acushnet Holdings Corp and OneSpaWorld Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpaWorld Holdings and Acushnet 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 Acushnet Holdings Corp are associated (or correlated) with OneSpaWorld Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSpaWorld Holdings has no effect on the direction of Acushnet Holdings i.e., Acushnet Holdings and OneSpaWorld Holdings go up and down completely randomly.

Pair Corralation between Acushnet Holdings and OneSpaWorld Holdings

Given the investment horizon of 90 days Acushnet Holdings Corp is expected to under-perform the OneSpaWorld Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Acushnet Holdings Corp is 1.17 times less risky than OneSpaWorld Holdings. The stock trades about -0.06 of its potential returns per unit of risk. The OneSpaWorld Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,899  in OneSpaWorld Holdings on November 28, 2024 and sell it today you would lose (16.00) from holding OneSpaWorld Holdings or give up 0.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Acushnet Holdings Corp  vs.  OneSpaWorld Holdings

Acushnet Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acushnet Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

OneSpaWorld Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days OneSpaWorld Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, OneSpaWorld Holdings is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Acushnet Holdings and OneSpaWorld Holdings

The main advantage of trading using opposite Acushnet Holdings and OneSpaWorld Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acushnet Holdings position performs unexpectedly, OneSpaWorld Holdings 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 OneSpaWorld Holdings will offset losses from the drop in OneSpaWorld Holdings' long position.

The idea behind Acushnet Holdings Corp and OneSpaWorld Holdings 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.