Correlation Between OneSpan and Payfare

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

By analyzing existing cross correlation between OneSpan and Payfare, you can compare the effects of market volatilities on OneSpan and Payfare 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 Payfare. Check out your portfolio center. Please also check ongoing floating volatility patterns of OneSpan and Payfare.

Diversification Opportunities for OneSpan and Payfare

0.64

Correlation Coefficient

OneSpan  Payfare

Poor diversification

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

Pair Corralation between OneSpan and Payfare

Given the investment horizon of 90 days OneSpan is expected to generate 4.2 times less return on investment than Payfare. But when comparing it to its historical volatility, OneSpan is 4.21 times less risky than Payfare. It trades about 0.13 of its potential returns per unit of risk. Payfare is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  147.00  in Payfare on November 19, 2024 and sell it today you would earn a total of  123.00  from holding Payfare or generate 83.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

OneSpan  vs.  Payfare

OneSpan

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OneSpan are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, OneSpan displayed solid returns over the last few months and may actually be approaching a breakup point.

Payfare

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Payfare are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Payfare reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OneSpan and Payfare

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

The idea behind OneSpan and Payfare 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.