Correlation Between Fobi AI and OneSpan

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

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

Diversification Opportunities for Fobi AI and OneSpan

-0.8

Correlation Coefficient

Fobi AI  OneSpan

Pay attention - limited upside

The 3 months correlation between Fobi and OneSpan is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fobi AI and OneSpan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpan and Fobi AI 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 Fobi AI 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 Fobi AI i.e., Fobi AI and OneSpan go up and down completely randomly.

Pair Corralation between Fobi AI and OneSpan

Assuming the 90 days horizon Fobi AI is expected to generate 4.15 times less return on investment than OneSpan. In addition to that, Fobi AI is 6.48 times more volatile than OneSpan. It trades about 0.0 of its total potential returns per unit of risk. OneSpan is currently generating about 0.08 per unit of volatility. If you would invest  1,605  in OneSpan on September 22, 2024 and sell it today you would earn a total of  203.00  from holding OneSpan or generate 12.65% return on investment over 90 days.

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

Fobi AI  vs.  OneSpan

Fobi AI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fobi AI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Fobi AI is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

OneSpan

Risk-Adjusted Performance

5 of 100

Modest

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 Fobi AI and OneSpan

The main advantage of trading using opposite Fobi AI and OneSpan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fobi AI 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 Fobi AI 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.