Correlation Between Evertec and OneSpan

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

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

Diversification Opportunities for Evertec and OneSpan

-0.54

Correlation Coefficient

Evertec  OneSpan

Excellent diversification

The 3 months correlation between Evertec and OneSpan is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Evertec and OneSpan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpan and Evertec 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 Evertec 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 Evertec i.e., Evertec and OneSpan go up and down completely randomly.

Pair Corralation between Evertec and OneSpan

Given the investment horizon of 90 days Evertec is expected to generate 0.96 times more return on investment than OneSpan. However, Evertec is 1.04 times less risky than OneSpan. It trades about 0.03 of its potential returns per unit of risk. OneSpan is currently generating about -0.12 per unit of risk. If you would invest  3,206  in Evertec on January 12, 2025 and sell it today you would earn a total of  120.00  from holding Evertec or generate 3.74% return on investment over 90 days.

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

Evertec  vs.  OneSpan

Evertec

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Evertec are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Evertec is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

OneSpan

Risk-Adjusted Performance

Very Weak

Over the last 90 days OneSpan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Evertec and OneSpan

The main advantage of trading using opposite Evertec and OneSpan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evertec 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 Evertec 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.