Correlation Between Vishay Precision and Cool
Can any of the company-specific risk be diversified away by investing in both Vishay Precision and Cool 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 Vishay Precision and Cool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vishay Precision Group and Cool Company, you can compare the effects of market volatilities on Vishay Precision and Cool 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 Vishay Precision with a short position of Cool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Precision and Cool.
Diversification Opportunities for Vishay Precision and Cool
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vishay and Cool is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Precision Group and Cool Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Company and Vishay Precision 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 Vishay Precision Group are associated (or correlated) with Cool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Company has no effect on the direction of Vishay Precision i.e., Vishay Precision and Cool go up and down completely randomly.
Pair Corralation between Vishay Precision and Cool
Considering the 90-day investment horizon Vishay Precision Group is expected to under-perform the Cool. But the stock apears to be less risky and, when comparing its historical volatility, Vishay Precision Group is 1.1 times less risky than Cool. The stock trades about -0.04 of its potential returns per unit of risk. The Cool Company is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,044 in Cool Company on September 13, 2024 and sell it today you would lose (319.00) from holding Cool Company or give up 30.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.66% |
| Values | Daily Returns |
Vishay Precision Group vs. Cool Company
Performance |
| Timeline |
| Vishay Precision |
| Cool Company |
Vishay Precision and Cool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Precision and Cool
The main advantage of trading using opposite Vishay Precision and Cool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Precision position performs unexpectedly, Cool 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 Cool will offset losses from the drop in Cool's long position.| Vishay Precision vs. Mesa Laboratories | Vishay Precision vs. Itron Inc | Vishay Precision vs. Fortive Corp | Vishay Precision vs. ESCO Technologies |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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