Correlation Between OFG Bancorp and Stewart Information

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

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

Diversification Opportunities for OFG Bancorp and Stewart Information

0.34

Correlation Coefficient

OFG Bancorp  Stewart Information

Weak diversification

The 3 months correlation between OFG and Stewart is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding OFG Bancorp and Stewart Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stewart Information and OFG Bancorp 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 OFG Bancorp are associated (or correlated) with Stewart Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stewart Information has no effect on the direction of OFG Bancorp i.e., OFG Bancorp and Stewart Information go up and down completely randomly.

Pair Corralation between OFG Bancorp and Stewart Information

Considering the 90-day investment horizon OFG Bancorp is expected to under-perform the Stewart Information. But the stock apears to be less risky and, when comparing its historical volatility, OFG Bancorp is 1.21 times less risky than Stewart Information. The stock trades about -0.1 of its potential returns per unit of risk. The Stewart Information Services is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,263  in Stewart Information Services on August 24, 2025 and sell it today you would earn a total of  190.00  from holding Stewart Information Services or generate 2.62% return on investment over 90 days.

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

OFG Bancorp  vs.  Stewart Information Services

OFG Bancorp

Risk-Adjusted Performance

Weakest

Over the last 90 days OFG Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Stewart Information

Risk-Adjusted Performance

Weak

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

Pair Trading with OFG Bancorp and Stewart Information

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

The idea behind OFG Bancorp and Stewart Information Services 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.