Correlation Between OneSpan and Tenet Fintech

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

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

Diversification Opportunities for OneSpan and Tenet Fintech

0.37

Correlation Coefficient

OneSpan  Tenet Fintech

Weak diversification

The 3 months correlation between OneSpan and Tenet is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding OneSpan and Tenet Fintech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenet Fintech Group 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 Tenet Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenet Fintech Group has no effect on the direction of OneSpan i.e., OneSpan and Tenet Fintech go up and down completely randomly.

Pair Corralation between OneSpan and Tenet Fintech

Given the investment horizon of 90 days OneSpan is expected to generate 1.93 times less return on investment than Tenet Fintech. But when comparing it to its historical volatility, OneSpan is 3.73 times less risky than Tenet Fintech. It trades about 0.08 of its potential returns per unit of risk. Tenet Fintech Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  5.80  in Tenet Fintech Group on September 22, 2024 and sell it today you would lose (0.50) from holding Tenet Fintech Group or give up 8.62% of portfolio value over 90 days.

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

OneSpan  vs.  Tenet Fintech Group

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.

Tenet Fintech Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tenet Fintech Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Tenet Fintech reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OneSpan and Tenet Fintech

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

The idea behind OneSpan and Tenet Fintech Group 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.