Correlation Between Comtech Telecommunicatio and OSI Systems

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

By analyzing existing cross correlation between Comtech Telecommunications Corp and OSI Systems, you can compare the effects of market volatilities on Comtech Telecommunicatio 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 Comtech Telecommunicatio with a short position of OSI Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comtech Telecommunicatio and OSI Systems.

Diversification Opportunities for Comtech Telecommunicatio and OSI Systems

0.04

Correlation Coefficient

Comtech Telecommunicatio  OSI Systems

Significant diversification

The 3 months correlation between Comtech and OSI is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor and OSI Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSI Systems and Comtech Telecommunicatio 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 Comtech Telecommunications Corp 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 Comtech Telecommunicatio i.e., Comtech Telecommunicatio and OSI Systems go up and down completely randomly.

Pair Corralation between Comtech Telecommunicatio and OSI Systems

Given the investment horizon of 90 days Comtech Telecommunications Corp is expected to generate 3.04 times more return on investment than OSI Systems. However, Comtech Telecommunicatio is 3.04 times more volatile than OSI Systems. It trades about 0.13 of its potential returns per unit of risk. OSI Systems is currently generating about 0.02 per unit of risk. If you would invest  141.00  in Comtech Telecommunications Corp on May 6, 2025 and sell it today you would earn a total of  64.00  from holding Comtech Telecommunications Corp or generate 45.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Comtech Telecommunications Cor  vs.  OSI Systems

Comtech Telecommunicatio

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Comtech Telecommunications Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Comtech Telecommunicatio disclosed solid returns over the last few months and may actually be approaching a breakup point.

OSI Systems

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OSI Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, OSI Systems is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Comtech Telecommunicatio and OSI Systems

The main advantage of trading using opposite Comtech Telecommunicatio and OSI Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comtech Telecommunicatio 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 Comtech Telecommunications Corp 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.