Correlation Between OSI Systems and Murata Manufacturing
Can any of the company-specific risk be diversified away by investing in both OSI Systems and Murata Manufacturing 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 Murata Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OSI Systems and Murata Manufacturing, you can compare the effects of market volatilities on OSI Systems and Murata Manufacturing 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 Murata Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSI Systems and Murata Manufacturing.
Diversification Opportunities for OSI Systems and Murata Manufacturing
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between OSI and Murata is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding OSI Systems and Murata Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murata Manufacturing 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 Murata Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murata Manufacturing has no effect on the direction of OSI Systems i.e., OSI Systems and Murata Manufacturing go up and down completely randomly.
Pair Corralation between OSI Systems and Murata Manufacturing
Given the investment horizon of 90 days OSI Systems is expected to generate 1.97 times more return on investment than Murata Manufacturing. However, OSI Systems is 1.97 times more volatile than Murata Manufacturing. It trades about 0.26 of its potential returns per unit of risk. Murata Manufacturing is currently generating about -0.03 per unit of risk. If you would invest 16,402 in OSI Systems on November 5, 2024 and sell it today you would earn a total of 3,242 from holding OSI Systems or generate 19.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OSI Systems vs. Murata Manufacturing
Performance |
| Timeline |
| OSI Systems |
| Murata Manufacturing |
OSI Systems and Murata Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OSI Systems and Murata Manufacturing
The main advantage of trading using opposite OSI Systems and Murata Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSI Systems position performs unexpectedly, Murata Manufacturing 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 Murata Manufacturing will offset losses from the drop in Murata Manufacturing's long position.| OSI Systems vs. Sanmina | OSI Systems vs. Benchmark Electronics | OSI Systems vs. Methode Electronics | OSI Systems vs. Celestica |
| Murata Manufacturing vs. Celestica | Murata Manufacturing vs. Flex | Murata Manufacturing vs. OSI Systems | Murata Manufacturing vs. Data IO |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |