Correlation Between OSI Systems and CTS
Can any of the company-specific risk be diversified away by investing in both OSI Systems and CTS 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 CTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OSI Systems and CTS Corporation, you can compare the effects of market volatilities on OSI Systems and CTS 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 CTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSI Systems and CTS.
Diversification Opportunities for OSI Systems and CTS
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between OSI and CTS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding OSI Systems and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation 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 CTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Corporation has no effect on the direction of OSI Systems i.e., OSI Systems and CTS go up and down completely randomly.
Pair Corralation between OSI Systems and CTS
Given the investment horizon of 90 days OSI Systems is expected to generate 1.19 times more return on investment than CTS. However, OSI Systems is 1.19 times more volatile than CTS Corporation. It trades about 0.04 of its potential returns per unit of risk. CTS Corporation is currently generating about 0.02 per unit of risk. If you would invest 22,778 in OSI Systems on April 9, 2025 and sell it today you would earn a total of 303.00 from holding OSI Systems or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
OSI Systems vs. CTS Corp.
Performance |
| Timeline |
| OSI Systems |
| CTS Corporation |
OSI Systems and CTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OSI Systems and CTS
The main advantage of trading using opposite OSI Systems and CTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSI Systems position performs unexpectedly, CTS 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 CTS will offset losses from the drop in CTS's long position.| OSI Systems vs. RBC Bearings Incorporated | OSI Systems vs. National Vision Holdings | OSI Systems vs. Weyco Group | OSI Systems vs. Inter Parfums |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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