Correlation Between Knowles Cor and OSI Systems
Can any of the company-specific risk be diversified away by investing in both Knowles Cor 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 Knowles Cor and OSI Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles Cor and OSI Systems, you can compare the effects of market volatilities on Knowles Cor 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 Knowles Cor with a short position of OSI Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and OSI Systems.
Diversification Opportunities for Knowles Cor and OSI Systems
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Knowles and OSI is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and OSI Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSI Systems and Knowles Cor 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 Knowles Cor 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 Knowles Cor i.e., Knowles Cor and OSI Systems go up and down completely randomly.
Pair Corralation between Knowles Cor and OSI Systems
Allowing for the 90-day total investment horizon Knowles Cor is expected to generate 2.75 times less return on investment than OSI Systems. In addition to that, Knowles Cor is 1.09 times more volatile than OSI Systems. It trades about 0.23 of its total potential returns per unit of risk. OSI Systems is currently generating about 0.67 per unit of volatility. If you would invest 13,216 in OSI Systems on September 2, 2024 and sell it today you would earn a total of 4,524 from holding OSI Systems or generate 34.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knowles Cor vs. OSI Systems
Performance |
| Timeline |
| Knowles Cor |
| OSI Systems |
Knowles Cor and OSI Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowles Cor and OSI Systems
The main advantage of trading using opposite Knowles Cor and OSI Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles Cor 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.| Knowles Cor vs. Mynaric AG ADR | Knowles Cor vs. Comtech Telecommunications Corp | Knowles Cor vs. Ituran Location and | Knowles Cor vs. Aviat Networks |
| OSI Systems vs. Knowles Cor | OSI Systems vs. Ubiquiti Networks | OSI Systems vs. AmpliTech Group | OSI Systems vs. Viavi Solutions |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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