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

0.58

Correlation Coefficient

OSI Systems  Corning Incorporated

Very weak diversification

The 3 months correlation between OSI and Corning is 0.58. 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 1.33 times more return on investment than Corning Incorporated. However, OSI Systems is 1.33 times more volatile than Corning Incorporated. It trades about 0.1 of its potential returns per unit of risk. Corning Incorporated is currently generating about 0.0 per unit of risk. If you would invest  17,135  in OSI Systems on December 27, 2024 and sell it today you would earn a total of  2,776  from holding OSI Systems or generate 16.2% 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.  Corning Incorporated

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 weak forward indicators, OSI Systems unveiled solid returns over the last few months and may actually be approaching a breakup point.

Corning Incorporated

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corning Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Corning Incorporated is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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.

The idea behind OSI Systems and Corning Incorporated 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.