Correlation Between OneSpan and Consensus Cloud

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

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

Diversification Opportunities for OneSpan and Consensus Cloud

0.49

Correlation Coefficient

OneSpan  Consensus Cloud

Very weak diversification

The 3 months correlation between OneSpan and Consensus is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding OneSpan and Consensus Cloud Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consensus Cloud Solutions and OneSpan 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 OneSpan are associated (or correlated) with Consensus Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consensus Cloud Solutions has no effect on the direction of OneSpan i.e., OneSpan and Consensus Cloud go up and down completely randomly.

Pair Corralation between OneSpan and Consensus Cloud

Given the investment horizon of 90 days OneSpan is expected to under-perform the Consensus Cloud. But the stock apears to be less risky and, when comparing its historical volatility, OneSpan is 1.02 times less risky than Consensus Cloud. The stock trades about -0.05 of its potential returns per unit of risk. The Consensus Cloud Solutions is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,495  in Consensus Cloud Solutions on November 28, 2024 and sell it today you would earn a total of  95.00  from holding Consensus Cloud Solutions or generate 3.81% return on investment over 90 days.

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

OneSpan  vs.  Consensus Cloud Solutions

OneSpan

Risk-Adjusted Performance

Very Weak

Over the last 90 days OneSpan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Consensus Cloud Solutions

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Consensus Cloud Solutions are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Consensus Cloud may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with OneSpan and Consensus Cloud

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

The idea behind OneSpan and Consensus Cloud Solutions 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.