Correlation Between OSI Systems and Ondas Holdings

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

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

Diversification Opportunities for OSI Systems and Ondas Holdings

0.21

Correlation Coefficient

OSI Systems  Ondas Holdings

Modest diversification

The 3 months correlation between OSI and Ondas is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding OSI Systems and Ondas Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ondas Holdings 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 Ondas Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ondas Holdings has no effect on the direction of OSI Systems i.e., OSI Systems and Ondas Holdings go up and down completely randomly.

Pair Corralation between OSI Systems and Ondas Holdings

Given the investment horizon of 90 days OSI Systems is expected to under-perform the Ondas Holdings. But the stock apears to be less risky and, when comparing its historical volatility, OSI Systems is 8.36 times less risky than Ondas Holdings. The stock trades about -0.34 of its potential returns per unit of risk. The Ondas Holdings is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest  81.00  in Ondas Holdings on October 10, 2024 and sell it today you would earn a total of  184.00  from holding Ondas Holdings or generate 227.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

OSI Systems  vs.  Ondas Holdings

OSI Systems

Risk-Adjusted Performance

7 of 100

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 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Ondas Holdings

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ondas Holdings are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Ondas Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OSI Systems and Ondas Holdings

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

The idea behind OSI Systems and Ondas Holdings 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.