Correlation Between OSI Systems and Celestica

Can any of the company-specific risk be diversified away by investing in both OSI Systems and Celestica 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 Celestica into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between OSI Systems and Celestica, you can compare the effects of market volatilities on OSI Systems and Celestica 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 Celestica. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSI Systems and Celestica.

Diversification Opportunities for OSI Systems and Celestica

0.49

Correlation Coefficient

OSI Systems  Celestica

Very weak diversification

The 3 months correlation between OSI and Celestica is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding OSI Systems and Celestica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestica 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 Celestica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celestica has no effect on the direction of OSI Systems i.e., OSI Systems and Celestica go up and down completely randomly.

Pair Corralation between OSI Systems and Celestica

Given the investment horizon of 90 days OSI Systems is expected to generate 0.48 times more return on investment than Celestica. However, OSI Systems is 2.1 times less risky than Celestica. It trades about 0.09 of its potential returns per unit of risk. Celestica is currently generating about 0.0 per unit of risk. If you would invest  16,725  in OSI Systems on December 28, 2024 and sell it today you would earn a total of  2,607  from holding OSI Systems or generate 15.59% 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.  Celestica

OSI Systems

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OSI Systems are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating forward indicators, OSI Systems unveiled solid returns over the last few months and may actually be approaching a breakup point.

Celestica

Risk-Adjusted Performance

Very Weak

Over the last 90 days Celestica has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Celestica is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with OSI Systems and Celestica

The main advantage of trading using opposite OSI Systems and Celestica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSI Systems position performs unexpectedly, Celestica 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 Celestica will offset losses from the drop in Celestica's long position.

The idea behind OSI Systems and Celestica pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.