Correlation Between Littelfuse and Vicor
Can any of the company-specific risk be diversified away by investing in both Littelfuse 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 Littelfuse and Vicor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Littelfuse and Vicor, you can compare the effects of market volatilities on Littelfuse 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 Littelfuse with a short position of Vicor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Littelfuse and Vicor.
Diversification Opportunities for Littelfuse and Vicor
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Littelfuse and Vicor is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Littelfuse and Vicor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicor and Littelfuse 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 Littelfuse 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 Littelfuse i.e., Littelfuse and Vicor go up and down completely randomly.
Pair Corralation between Littelfuse and Vicor
Given the investment horizon of 90 days Littelfuse is expected to under-perform the Vicor. But the stock apears to be less risky and, when comparing its historical volatility, Littelfuse is 1.84 times less risky than Vicor. The stock trades about -0.02 of its potential returns per unit of risk. The Vicor is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,494 in Vicor on August 24, 2024 and sell it today you would earn a total of 1,929 from holding Vicor or generate 55.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Littelfuse vs. Vicor
Performance |
| Timeline |
| Littelfuse |
| Vicor |
Littelfuse and Vicor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Littelfuse and Vicor
The main advantage of trading using opposite Littelfuse and Vicor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Littelfuse 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.| Littelfuse vs. Plexus Corp | Littelfuse vs. Celestica | Littelfuse vs. Benchmark Electronics | Littelfuse vs. Flex |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Transaction History View history of all your transactions and understand their impact on performance |