Correlation Between Benchmark Electronics and OSI Systems
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics and OSI Systems 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 Benchmark Electronics and OSI Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and OSI Systems, you can compare the effects of market volatilities on Benchmark Electronics and OSI Systems 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 Benchmark Electronics with a short position of OSI Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and OSI Systems.
Diversification Opportunities for Benchmark Electronics and OSI Systems
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Benchmark and OSI is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and OSI Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSI Systems and Benchmark Electronics 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 Benchmark Electronics are associated (or correlated) with OSI Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSI Systems has no effect on the direction of Benchmark Electronics i.e., Benchmark Electronics and OSI Systems go up and down completely randomly.
Pair Corralation between Benchmark Electronics and OSI Systems
Considering the 90-day investment horizon Benchmark Electronics is expected to generate 1.39 times less return on investment than OSI Systems. In addition to that, Benchmark Electronics is 1.22 times more volatile than OSI Systems. It trades about 0.16 of its total potential returns per unit of risk. OSI Systems is currently generating about 0.27 per unit of volatility. If you would invest 14,215 in OSI Systems on August 24, 2024 and sell it today you would earn a total of 2,318 from holding OSI Systems or generate 16.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Electronics vs. OSI Systems
Performance |
| Timeline |
| Benchmark Electronics |
| OSI Systems |
Benchmark Electronics and OSI Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and OSI Systems
The main advantage of trading using opposite Benchmark Electronics and OSI Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics position performs unexpectedly, OSI Systems 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 OSI Systems will offset losses from the drop in OSI Systems' long position.| Benchmark Electronics vs. Plexus Corp | Benchmark Electronics vs. Jabil Circuit | Benchmark Electronics vs. Rogers | Benchmark Electronics vs. Sanmina |
| OSI Systems vs. Sanmina | OSI Systems vs. Benchmark Electronics | OSI Systems vs. Methode Electronics | OSI Systems vs. Celestica |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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