Correlation Between SOS and OneSpan

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

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

Diversification Opportunities for SOS and OneSpan

-0.73

Correlation Coefficient

SOS  OneSpan

Pay attention - limited upside

The 3 months correlation between SOS and OneSpan is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SOS Limited and OneSpan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpan and SOS 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 SOS Limited are associated (or correlated) with OneSpan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSpan has no effect on the direction of SOS i.e., SOS and OneSpan go up and down completely randomly.

Pair Corralation between SOS and OneSpan

Considering the 90-day investment horizon SOS Limited is expected to under-perform the OneSpan. In addition to that, SOS is 3.04 times more volatile than OneSpan. It trades about -0.02 of its total potential returns per unit of risk. OneSpan is currently generating about 0.12 per unit of volatility. If you would invest  1,249  in OneSpan on September 19, 2024 and sell it today you would earn a total of  553.00  from holding OneSpan or generate 44.28% return on investment over 90 days.

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

SOS Limited  vs.  OneSpan

SOS Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SOS Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SOS is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

OneSpan

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OneSpan are ranked lower than 5 (%) 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.

Pair Trading with SOS and OneSpan

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

The idea behind SOS Limited and OneSpan 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.