Correlation Between Analog Devices and One Stop

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

By analyzing existing cross correlation between Analog Devices and One Stop Systems, you can compare the effects of market volatilities on Analog Devices and One Stop 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 Analog Devices with a short position of One Stop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and One Stop.

Diversification Opportunities for Analog Devices and One Stop

0.74

Correlation Coefficient

Analog Devices  One Stop

Poor diversification

The 3 months correlation between Analog and One is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and One Stop Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Stop Systems and Analog Devices 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 Analog Devices are associated (or correlated) with One Stop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Stop Systems has no effect on the direction of Analog Devices i.e., Analog Devices and One Stop go up and down completely randomly.

Pair Corralation between Analog Devices and One Stop

Considering the 90-day investment horizon Analog Devices is expected to generate 5.52 times less return on investment than One Stop. But when comparing it to its historical volatility, Analog Devices is 3.32 times less risky than One Stop. It trades about 0.17 of its potential returns per unit of risk. One Stop Systems is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  222.00  in One Stop Systems on April 29, 2025 and sell it today you would earn a total of  322.00  from holding One Stop Systems or generate 145.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Analog Devices  vs.  One Stop Systems

Analog Devices

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Devices are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental indicators, Analog Devices demonstrated solid returns over the last few months and may actually be approaching a breakup point.

One Stop Systems

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in One Stop Systems are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, One Stop unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Analog Devices and One Stop

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

The idea behind Analog Devices and One Stop 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.