Correlation Between EHEALTH and Vishay Intertechnology
Can any of the company-specific risk be diversified away by investing in both EHEALTH and Vishay Intertechnology 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 EHEALTH and Vishay Intertechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and Vishay Intertechnology, you can compare the effects of market volatilities on EHEALTH and Vishay Intertechnology 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 EHEALTH with a short position of Vishay Intertechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and Vishay Intertechnology.
Diversification Opportunities for EHEALTH and Vishay Intertechnology
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between EHEALTH and Vishay is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology and EHEALTH 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 EHEALTH are associated (or correlated) with Vishay Intertechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Intertechnology has no effect on the direction of EHEALTH i.e., EHEALTH and Vishay Intertechnology go up and down completely randomly.
Pair Corralation between EHEALTH and Vishay Intertechnology
Assuming the 90 days trading horizon EHEALTH is expected to generate 1.35 times more return on investment than Vishay Intertechnology. However, EHEALTH is 1.35 times more volatile than Vishay Intertechnology. It trades about 0.2 of its potential returns per unit of risk. Vishay Intertechnology is currently generating about 0.21 per unit of risk. If you would invest 441.00 in EHEALTH on September 4, 2024 and sell it today you would earn a total of 96.00 from holding EHEALTH or generate 21.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
EHEALTH vs. Vishay Intertechnology
Performance |
| Timeline |
| EHEALTH |
| Vishay Intertechnology |
EHEALTH and Vishay Intertechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHEALTH and Vishay Intertechnology
The main advantage of trading using opposite EHEALTH and Vishay Intertechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH position performs unexpectedly, Vishay Intertechnology 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 Vishay Intertechnology will offset losses from the drop in Vishay Intertechnology's long position.The idea behind EHEALTH and Vishay Intertechnology 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.| Vishay Intertechnology vs. SENECA FOODS A | Vishay Intertechnology vs. JJ SNACK FOODS | Vishay Intertechnology vs. Lifeway Foods | Vishay Intertechnology vs. Digilife Technologies Limited |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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