Correlation Between OneSavings Bank and LPKF Laser

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

Diversification Opportunities for OneSavings Bank and LPKF Laser

-0.15

Correlation Coefficient

OneSavings Bank  LPKF Laser

Good diversification

The 3 months correlation between OneSavings and LPKF is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding OneSavings Bank PLC and LPKF Laser Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPKF Laser Electronics 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 LPKF Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPKF Laser Electronics has no effect on the direction of OneSavings Bank i.e., OneSavings Bank and LPKF Laser go up and down completely randomly.

Pair Corralation between OneSavings Bank and LPKF Laser

Assuming the 90 days trading horizon OneSavings Bank PLC is expected to generate 0.98 times more return on investment than LPKF Laser. However, OneSavings Bank PLC is 1.02 times less risky than LPKF Laser. It trades about 0.14 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about 0.04 per unit of risk. If you would invest  36,000  in OneSavings Bank PLC on October 7, 2024 and sell it today you would earn a total of  3,580  from holding OneSavings Bank PLC or generate 9.94% return on investment over 90 days.

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

OneSavings Bank PLC  vs.  LPKF Laser Electronics

OneSavings Bank PLC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OneSavings Bank PLC are ranked lower than 1 (%) 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.

LPKF Laser Electronics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LPKF Laser Electronics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, LPKF Laser is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with OneSavings Bank and LPKF Laser

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

The idea behind OneSavings Bank PLC and LPKF Laser Electronics 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.