Correlation Between One Group and Cannae Holdings

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

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

Diversification Opportunities for One Group and Cannae Holdings

-0.36

Correlation Coefficient

One Group  Cannae Holdings

Very good diversification

The 3 months correlation between One and Cannae is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding One Group Hospitality and Cannae Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannae Holdings and One Group 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 One Group Hospitality are associated (or correlated) with Cannae Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannae Holdings has no effect on the direction of One Group i.e., One Group and Cannae Holdings go up and down completely randomly.

Pair Corralation between One Group and Cannae Holdings

Given the investment horizon of 90 days One Group Hospitality is expected to under-perform the Cannae Holdings. In addition to that, One Group is 1.96 times more volatile than Cannae Holdings. It trades about -0.03 of its total potential returns per unit of risk. Cannae Holdings is currently generating about -0.01 per unit of volatility. If you would invest  2,265  in Cannae Holdings on October 3, 2024 and sell it today you would lose (279.00) from holding Cannae Holdings or give up 12.32% of portfolio value over 90 days.

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

One Group Hospitality  vs.  Cannae Holdings

One Group Hospitality

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days One Group Hospitality has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Cannae Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cannae Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Cannae Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with One Group and Cannae Holdings

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

The idea behind One Group Hospitality and Cannae Holdings 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.