Correlation Between Modine Manufacturing and Vishay Intertechnology
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing 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 Modine Manufacturing and Vishay Intertechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and Vishay Intertechnology, you can compare the effects of market volatilities on Modine Manufacturing 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 Modine Manufacturing with a short position of Vishay Intertechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and Vishay Intertechnology.
Diversification Opportunities for Modine Manufacturing and Vishay Intertechnology
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Modine and Vishay is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology and Modine Manufacturing 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 Modine Manufacturing 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 Modine Manufacturing i.e., Modine Manufacturing and Vishay Intertechnology go up and down completely randomly.
Pair Corralation between Modine Manufacturing and Vishay Intertechnology
Considering the 90-day investment horizon Modine Manufacturing is expected to under-perform the Vishay Intertechnology. In addition to that, Modine Manufacturing is 1.06 times more volatile than Vishay Intertechnology. It trades about -0.08 of its total potential returns per unit of risk. Vishay Intertechnology is currently generating about 0.24 per unit of volatility. If you would invest 1,515 in Vishay Intertechnology on September 20, 2024 and sell it today you would earn a total of 223.00 from holding Vishay Intertechnology or generate 14.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modine Manufacturing vs. Vishay Intertechnology
Performance |
| Timeline |
| Modine Manufacturing |
| Vishay Intertechnology |
Modine Manufacturing and Vishay Intertechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modine Manufacturing and Vishay Intertechnology
The main advantage of trading using opposite Modine Manufacturing and Vishay Intertechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing 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.| Modine Manufacturing vs. Ford Motor | Modine Manufacturing vs. General Motors | Modine Manufacturing vs. Goodyear Tire Rubber | Modine Manufacturing vs. Li Auto |
| Vishay Intertechnology vs. IONQ Inc | Vishay Intertechnology vs. Quantum | Vishay Intertechnology vs. Super Micro Computer | Vishay Intertechnology vs. Red Cat Holdings |
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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