Correlation Between PC Connection and OneSpaWorld Holdings

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

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

Diversification Opportunities for PC Connection and OneSpaWorld Holdings

-0.41

Correlation Coefficient

PC Connection  OneSpaWorld Holdings

Very good diversification

The 3 months correlation between CNXN and OneSpaWorld is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding PC Connection and OneSpaWorld Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpaWorld Holdings and PC Connection 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 PC Connection are associated (or correlated) with OneSpaWorld Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSpaWorld Holdings has no effect on the direction of PC Connection i.e., PC Connection and OneSpaWorld Holdings go up and down completely randomly.

Pair Corralation between PC Connection and OneSpaWorld Holdings

Given the investment horizon of 90 days PC Connection is expected to under-perform the OneSpaWorld Holdings. But the stock apears to be less risky and, when comparing its historical volatility, PC Connection is 1.28 times less risky than OneSpaWorld Holdings. The stock trades about -0.15 of its potential returns per unit of risk. The OneSpaWorld Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,862  in OneSpaWorld Holdings on May 7, 2025 and sell it today you would earn a total of  373.00  from holding OneSpaWorld Holdings or generate 20.03% return on investment over 90 days.

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

PC Connection  vs.  OneSpaWorld Holdings

PC Connection

Risk-Adjusted Performance

Weakest

Over the last 90 days PC Connection 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 healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

OneSpaWorld Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in OneSpaWorld Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, OneSpaWorld Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PC Connection and OneSpaWorld Holdings

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

The idea behind PC Connection and OneSpaWorld 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.