Correlation Between OSI Systems and CTS
Can any of the company-specific risk be diversified away by investing in both OSI Systems and CTS 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 OSI Systems and CTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OSI Systems and CTS Corporation, you can compare the effects of market volatilities on OSI Systems and CTS 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 OSI Systems with a short position of CTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSI Systems and CTS.
Diversification Opportunities for OSI Systems and CTS
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OSI and CTS is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding OSI Systems and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation and OSI Systems 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 OSI Systems are associated (or correlated) with CTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Corporation has no effect on the direction of OSI Systems i.e., OSI Systems and CTS go up and down completely randomly.
Pair Corralation between OSI Systems and CTS
Given the investment horizon of 90 days OSI Systems is expected to generate 0.83 times more return on investment than CTS. However, OSI Systems is 1.21 times less risky than CTS. It trades about 0.27 of its potential returns per unit of risk. CTS Corporation is currently generating about 0.19 per unit of risk. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OSI Systems vs. CTS Corp.
Performance |
| Timeline |
| OSI Systems |
| CTS Corporation |
OSI Systems and CTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OSI Systems and CTS
The main advantage of trading using opposite OSI Systems and CTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSI Systems position performs unexpectedly, CTS 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 CTS will offset losses from the drop in CTS's long position.| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |