Correlation Between Two Harbors and OneMain Holdings

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

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

Diversification Opportunities for Two Harbors and OneMain Holdings

-0.67

Correlation Coefficient

Two Harbors  OneMain Holdings

Excellent diversification

The 3 months correlation between Two and OneMain is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Two Harbors Investments and OneMain Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneMain Holdings and Two Harbors 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 Two Harbors Investments are associated (or correlated) with OneMain Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneMain Holdings has no effect on the direction of Two Harbors i.e., Two Harbors and OneMain Holdings go up and down completely randomly.

Pair Corralation between Two Harbors and OneMain Holdings

Considering the 90-day investment horizon Two Harbors Investments is expected to under-perform the OneMain Holdings. In addition to that, Two Harbors is 1.07 times more volatile than OneMain Holdings. It trades about -0.14 of its total potential returns per unit of risk. OneMain Holdings is currently generating about 0.17 per unit of volatility. If you would invest  4,790  in OneMain Holdings on May 4, 2025 and sell it today you would earn a total of  859.00  from holding OneMain Holdings or generate 17.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Two Harbors Investments  vs.  OneMain Holdings

Two Harbors Investments

Risk-Adjusted Performance

Very Weak

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

OneMain Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in OneMain Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady primary indicators, OneMain Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Two Harbors and OneMain Holdings

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

The idea behind Two Harbors Investments and OneMain 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.