Correlation Between Repay Holdings and OneSpan

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

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

Diversification Opportunities for Repay Holdings and OneSpan

0.39

Correlation Coefficient

Repay Holdings  OneSpan

Weak diversification

The 3 months correlation between Repay and OneSpan is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Repay Holdings Corp and OneSpan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpan and Repay Holdings 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 Repay Holdings Corp 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 Repay Holdings i.e., Repay Holdings and OneSpan go up and down completely randomly.

Pair Corralation between Repay Holdings and OneSpan

Given the investment horizon of 90 days Repay Holdings is expected to generate 6.39 times less return on investment than OneSpan. But when comparing it to its historical volatility, Repay Holdings Corp is 1.22 times less risky than OneSpan. It trades about 0.03 of its potential returns per unit of risk. OneSpan is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,501  in OneSpan on September 22, 2024 and sell it today you would earn a total of  324.00  from holding OneSpan or generate 21.59% return on investment over 90 days.

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

Repay Holdings Corp  vs.  OneSpan

Repay Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Repay Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 Repay Holdings and OneSpan

The main advantage of trading using opposite Repay Holdings and OneSpan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repay Holdings 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 Repay Holdings Corp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .