Correlation Between OSI Systems and Corning Incorporated
Can any of the company-specific risk be diversified away by investing in both OSI Systems and Corning Incorporated 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 Corning Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OSI Systems and Corning Incorporated, you can compare the effects of market volatilities on OSI Systems and Corning Incorporated 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 Corning Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSI Systems and Corning Incorporated.
Diversification Opportunities for OSI Systems and Corning Incorporated
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OSI and Corning is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding OSI Systems and Corning Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corning Incorporated 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 Corning Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corning Incorporated has no effect on the direction of OSI Systems i.e., OSI Systems and Corning Incorporated go up and down completely randomly.
Pair Corralation between OSI Systems and Corning Incorporated
Given the investment horizon of 90 days OSI Systems is expected to generate 1.2 times more return on investment than Corning Incorporated. However, OSI Systems is 1.2 times more volatile than Corning Incorporated. It trades about 0.35 of its potential returns per unit of risk. Corning Incorporated is currently generating about 0.1 per unit of risk. If you would invest 16,656 in OSI Systems on November 18, 2024 and sell it today you would earn a total of 4,511 from holding OSI Systems or generate 27.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OSI Systems vs. Corning Incorporated
Performance |
| Timeline |
| OSI Systems |
| Corning Incorporated |
OSI Systems and Corning Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OSI Systems and Corning Incorporated
The main advantage of trading using opposite OSI Systems and Corning Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSI Systems position performs unexpectedly, Corning Incorporated 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 Corning Incorporated will offset losses from the drop in Corning Incorporated's long position.| OSI Systems vs. Sanmina | OSI Systems vs. Benchmark Electronics | OSI Systems vs. Methode Electronics | OSI Systems vs. Celestica |
| Corning Incorporated vs. OSI Systems | Corning Incorporated vs. Fabrinet | Corning Incorporated vs. Jabil Circuit | Corning Incorporated vs. Vicor |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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