Correlation Between OneSavings Bank and VeriSign

Can any of the company-specific risk be diversified away by investing in both OneSavings Bank and VeriSign 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 VeriSign 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 VeriSign, you can compare the effects of market volatilities on OneSavings Bank and VeriSign 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 VeriSign. Check out your portfolio center. Please also check ongoing floating volatility patterns of OneSavings Bank and VeriSign.

Diversification Opportunities for OneSavings Bank and VeriSign

0.76

Correlation Coefficient

OneSavings Bank  VeriSign

Poor diversification

The 3 months correlation between OneSavings and VeriSign is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding OneSavings Bank PLC and VeriSign in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VeriSign 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 VeriSign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VeriSign has no effect on the direction of OneSavings Bank i.e., OneSavings Bank and VeriSign go up and down completely randomly.

Pair Corralation between OneSavings Bank and VeriSign

Assuming the 90 days trading horizon OneSavings Bank PLC is expected to under-perform the VeriSign. In addition to that, OneSavings Bank is 1.86 times more volatile than VeriSign. It trades about -0.01 of its total potential returns per unit of risk. VeriSign is currently generating about 0.1 per unit of volatility. If you would invest  17,496  in VeriSign on September 30, 2024 and sell it today you would earn a total of  2,874  from holding VeriSign or generate 16.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.64%
Values	Daily Returns

OneSavings Bank PLC  vs.  VeriSign

OneSavings Bank PLC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OneSavings Bank PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, OneSavings Bank is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

VeriSign

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VeriSign are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VeriSign may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with OneSavings Bank and VeriSign

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

The idea behind OneSavings Bank PLC and VeriSign 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.