Correlation Between OneSpan and Crowdstrike Holdings

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

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

Diversification Opportunities for OneSpan and Crowdstrike Holdings

0.11

Correlation Coefficient

OneSpan  Crowdstrike Holdings

Average diversification

The 3 months correlation between OneSpan and Crowdstrike is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding OneSpan and Crowdstrike Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crowdstrike Holdings 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 Crowdstrike Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crowdstrike Holdings has no effect on the direction of OneSpan i.e., OneSpan and Crowdstrike Holdings go up and down completely randomly.

Pair Corralation between OneSpan and Crowdstrike Holdings

Given the investment horizon of 90 days OneSpan is expected to generate 1.1 times less return on investment than Crowdstrike Holdings. In addition to that, OneSpan is 1.57 times more volatile than Crowdstrike Holdings. It trades about 0.1 of its total potential returns per unit of risk. Crowdstrike Holdings is currently generating about 0.16 per unit of volatility. If you would invest  19,383  in Crowdstrike Holdings on February 6, 2024 and sell it today you would earn a total of  11,980  from holding Crowdstrike Holdings or generate 61.81% return on investment over 90 days.

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

OneSpan  vs.  Crowdstrike Holdings

OneSpan

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OneSpan are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, OneSpan displayed solid returns over the last few months and may actually be approaching a breakup point.

Crowdstrike Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Crowdstrike Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Crowdstrike Holdings may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with OneSpan and Crowdstrike Holdings

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

The idea behind OneSpan and Crowdstrike 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.