Correlation Between Deswell Industries and Vicor
Can any of the company-specific risk be diversified away by investing in both Deswell Industries and Vicor 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 Deswell Industries and Vicor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deswell Industries and Vicor, you can compare the effects of market volatilities on Deswell Industries and Vicor 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 Deswell Industries with a short position of Vicor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deswell Industries and Vicor.
Diversification Opportunities for Deswell Industries and Vicor
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Deswell and Vicor is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Deswell Industries and Vicor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicor and Deswell Industries 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 Deswell Industries are associated (or correlated) with Vicor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicor has no effect on the direction of Deswell Industries i.e., Deswell Industries and Vicor go up and down completely randomly.
Pair Corralation between Deswell Industries and Vicor
Given the investment horizon of 90 days Deswell Industries is expected to generate 2.33 times less return on investment than Vicor. But when comparing it to its historical volatility, Deswell Industries is 1.84 times less risky than Vicor. It trades about 0.15 of its potential returns per unit of risk. Vicor is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,573 in Vicor on September 2, 2024 and sell it today you would earn a total of 1,748 from holding Vicor or generate 48.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deswell Industries vs. Vicor
Performance |
| Timeline |
| Deswell Industries |
| Vicor |
Deswell Industries and Vicor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deswell Industries and Vicor
The main advantage of trading using opposite Deswell Industries and Vicor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deswell Industries position performs unexpectedly, Vicor 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 Vicor will offset losses from the drop in Vicor's long position.| Deswell Industries vs. Knowles Cor | Deswell Industries vs. Ubiquiti Networks | Deswell Industries vs. AmpliTech Group | Deswell Industries vs. Viavi Solutions |
| Vicor vs. Shenzhen Genvict Technologies | Vicor vs. Topsec Technologies Group | Vicor vs. Genus Power Infrastructures | Vicor vs. Risuntek |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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