Correlation Between OneSavings Bank and Dalata Hotel

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

Diversification Opportunities for OneSavings Bank and Dalata Hotel

0.39

Correlation Coefficient

OneSavings Bank  Dalata Hotel

Weak diversification

The 3 months correlation between OneSavings and Dalata is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding OneSavings Bank PLC and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group 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 Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of OneSavings Bank i.e., OneSavings Bank and Dalata Hotel go up and down completely randomly.

Pair Corralation between OneSavings Bank and Dalata Hotel

Assuming the 90 days trading horizon OneSavings Bank is expected to generate 10.25 times less return on investment than Dalata Hotel. In addition to that, OneSavings Bank is 1.03 times more volatile than Dalata Hotel Group. It trades about 0.01 of its total potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.07 per unit of volatility. If you would invest  37,500  in Dalata Hotel Group on September 29, 2024 and sell it today you would earn a total of  1,000.00  from holding Dalata Hotel Group or generate 2.67% return on investment over 90 days.

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

OneSavings Bank PLC  vs.  Dalata Hotel Group

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.

Dalata Hotel Group

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with OneSavings Bank and Dalata Hotel

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

The idea behind OneSavings Bank PLC and Dalata Hotel Group 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.