Correlation Between OneSpan and Verint Systems

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

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

Diversification Opportunities for OneSpan and Verint Systems

0.78

Correlation Coefficient

OneSpan  Verint Systems

Poor diversification

The 3 months correlation between OneSpan and Verint is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding OneSpan and Verint Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verint Systems 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 Verint Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verint Systems has no effect on the direction of OneSpan i.e., OneSpan and Verint Systems go up and down completely randomly.

Pair Corralation between OneSpan and Verint Systems

Given the investment horizon of 90 days OneSpan is expected to generate 1.54 times more return on investment than Verint Systems. However, OneSpan is 1.54 times more volatile than Verint Systems. It trades about -0.02 of its potential returns per unit of risk. Verint Systems is currently generating about -0.52 per unit of risk. If you would invest  1,888  in OneSpan on October 12, 2024 and sell it today you would lose (38.00) from holding OneSpan or give up 2.01% of portfolio value over 90 days.

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

OneSpan  vs.  Verint Systems

OneSpan

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OneSpan are ranked lower than 7 (%) 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.

Verint Systems

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Verint Systems are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Verint Systems may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with OneSpan and Verint Systems

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

The idea behind OneSpan and Verint Systems 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 Global Correlations module to find global opportunities by holding instruments from different markets.