Correlation Between Celestica and OSI Systems
Can any of the company-specific risk be diversified away by investing in both Celestica 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 Celestica and OSI Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celestica and OSI Systems, you can compare the effects of market volatilities on Celestica 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 Celestica with a short position of OSI Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestica and OSI Systems.
Diversification Opportunities for Celestica and OSI Systems
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Celestica and OSI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and OSI Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSI Systems and Celestica 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 Celestica 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 Celestica i.e., Celestica and OSI Systems go up and down completely randomly.
Pair Corralation between Celestica and OSI Systems
Considering the 90-day investment horizon Celestica is expected to generate 2.1 times more return on investment than OSI Systems. However, Celestica is 2.1 times more volatile than OSI Systems. It trades about 0.22 of its potential returns per unit of risk. OSI Systems is currently generating about 0.24 per unit of risk. If you would invest 9,307 in Celestica on November 3, 2024 and sell it today you would earn a total of 3,040 from holding Celestica or generate 32.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celestica vs. OSI Systems
Performance |
| Timeline |
| Celestica |
| OSI Systems |
Celestica and OSI Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celestica and OSI Systems
The main advantage of trading using opposite Celestica and OSI Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celestica 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.| Celestica vs. Plexus Corp | Celestica vs. Benchmark Electronics | Celestica vs. Flex | Celestica vs. Jabil Circuit |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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