Correlation Between OSI Systems and Digital Media
Can any of the company-specific risk be diversified away by investing in both OSI Systems and Digital Media 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 Digital Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OSI Systems and Digital Media Solutions, you can compare the effects of market volatilities on OSI Systems and Digital Media 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 Digital Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSI Systems and Digital Media.
Diversification Opportunities for OSI Systems and Digital Media
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between OSI and Digital is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding OSI Systems and Digital Media Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Media Solutions 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 Digital Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Media Solutions has no effect on the direction of OSI Systems i.e., OSI Systems and Digital Media go up and down completely randomly.
Pair Corralation between OSI Systems and Digital Media
Given the investment horizon of 90 days OSI Systems is expected to generate 0.26 times more return on investment than Digital Media. However, OSI Systems is 3.87 times less risky than Digital Media. It trades about 0.09 of its potential returns per unit of risk. Digital Media Solutions is currently generating about -0.1 per unit of risk. If you would invest 8,027 in OSI Systems on September 19, 2024 and sell it today you would earn a total of 9,554 from holding OSI Systems or generate 119.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 28.63% |
| Values | Daily Returns |
OSI Systems vs. Digital Media Solutions
Performance |
| Timeline |
| OSI Systems |
| Digital Media Solutions |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
OSI Systems and Digital Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OSI Systems and Digital Media
The main advantage of trading using opposite OSI Systems and Digital Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSI Systems position performs unexpectedly, Digital Media 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 Digital Media will offset losses from the drop in Digital Media's long position.| OSI Systems vs. Sanmina | OSI Systems vs. Benchmark Electronics | OSI Systems vs. Methode Electronics | OSI Systems vs. Celestica |
| Digital Media vs. Advantage Solutions | Digital Media vs. Townsquare Media | Digital Media vs. Entravision Communications | Digital Media vs. Emerald Expositions Events |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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