Correlation Between OneSpan and Bandwidth

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

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

Diversification Opportunities for OneSpan and Bandwidth

0.76

Correlation Coefficient

OneSpan  Bandwidth

Poor diversification

The 3 months correlation between OneSpan and Bandwidth is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding OneSpan and Bandwidth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bandwidth 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 Bandwidth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bandwidth has no effect on the direction of OneSpan i.e., OneSpan and Bandwidth go up and down completely randomly.

Pair Corralation between OneSpan and Bandwidth

Given the investment horizon of 90 days OneSpan is expected to under-perform the Bandwidth. In addition to that, OneSpan is 1.34 times more volatile than Bandwidth. It trades about -0.04 of its total potential returns per unit of risk. Bandwidth is currently generating about 0.0 per unit of volatility. If you would invest  1,425  in Bandwidth on August 26, 2025 and sell it today you would lose (32.00) from holding Bandwidth or give up 2.25% of portfolio value over 90 days.

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

OneSpan  vs.  Bandwidth

OneSpan

Risk-Adjusted Performance

Weakest

Over the last 90 days OneSpan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile 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.

Bandwidth

Risk-Adjusted Performance

Weakest

Over the last 90 days Bandwidth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Bandwidth is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with OneSpan and Bandwidth

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

The idea behind OneSpan and Bandwidth 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.

Check out your portfolio center.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.