Correlation Between Digimarc and OSI Systems

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Can any of the company-specific risk be diversified away by investing in both Digimarc and OSI Systems 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 Digimarc and OSI Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digimarc and OSI Systems, you can compare the effects of market volatilities on Digimarc and OSI Systems 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 Digimarc with a short position of OSI Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digimarc and OSI Systems.

Diversification Opportunities for Digimarc and OSI Systems

0.37
  Correlation Coefficient

Weak diversification

The 3 months correlation between Digimarc and OSI is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc and OSI Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSI Systems and Digimarc 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 Digimarc are associated (or correlated) with OSI Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSI Systems has no effect on the direction of Digimarc i.e., Digimarc and OSI Systems go up and down completely randomly.

Pair Corralation between Digimarc and OSI Systems

Given the investment horizon of 90 days Digimarc is expected to under-perform the OSI Systems. But the stock apears to be less risky and, when comparing its historical volatility, Digimarc is 1.16 times less risky than OSI Systems. The stock trades about -0.18 of its potential returns per unit of risk. The OSI Systems is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  22,405  in OSI Systems on April 28, 2025 and sell it today you would earn a total of  203.00  from holding OSI Systems or generate 0.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Digimarc  vs.  OSI Systems

 Performance 
       Timeline  
Digimarc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Digimarc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Digimarc is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
OSI Systems 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
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.

Digimarc and OSI Systems Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Digimarc and OSI Systems

The main advantage of trading using opposite Digimarc and OSI Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digimarc position performs unexpectedly, OSI Systems 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 OSI Systems will offset losses from the drop in OSI Systems' long position.
The idea behind Digimarc and OSI Systems 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.
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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