Correlation Between Oshkosh and O I

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

Diversification Opportunities for Oshkosh and O I

-0.03
  Correlation Coefficient

Good diversification

The 3 months correlation between Oshkosh and O I is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Oshkosh and O-I Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on O-I Glass and Oshkosh 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 Oshkosh are associated (or correlated) with O I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of O-I Glass has no effect on the direction of Oshkosh i.e., Oshkosh and O I go up and down completely randomly.

Pair Corralation between Oshkosh and O I

Considering the 90-day investment horizon Oshkosh is expected to generate 0.55 times more return on investment than O I. However, Oshkosh is 1.82 times less risky than O I. It trades about 0.41 of its potential returns per unit of risk. O I Glass is currently generating about -0.09 per unit of risk. If you would invest  10,947  in Oshkosh on December 29, 2023 and sell it today you would earn a total of  1,408  from holding Oshkosh or generate 12.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Oshkosh  vs.  O-I Glass

 Performance 
       Timeline  
Oshkosh 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Oshkosh are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Oshkosh disclosed solid returns over the last few months and may actually be approaching a breakup point.
O-I Glass 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days O I Glass has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, O I is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Oshkosh and O I Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oshkosh and O I

The main advantage of trading using opposite Oshkosh and O I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oshkosh position performs unexpectedly, O I 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 O I will offset losses from the drop in O I's long position.
The idea behind Oshkosh and O I Glass 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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