Correlation Between Vishay Precision and ESCO Technologies
Can any of the company-specific risk be diversified away by investing in both Vishay Precision and ESCO Technologies 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 ESCO Technologies 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 ESCO Technologies, you can compare the effects of market volatilities on Vishay Precision and ESCO Technologies 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 ESCO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Precision and ESCO Technologies.
Diversification Opportunities for Vishay Precision and ESCO Technologies
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vishay and ESCO is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Precision Group and ESCO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESCO Technologies 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 ESCO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESCO Technologies has no effect on the direction of Vishay Precision i.e., Vishay Precision and ESCO Technologies go up and down completely randomly.
Pair Corralation between Vishay Precision and ESCO Technologies
Considering the 90-day investment horizon Vishay Precision Group is expected to under-perform the ESCO Technologies. In addition to that, Vishay Precision is 1.35 times more volatile than ESCO Technologies. It trades about -0.05 of its total potential returns per unit of risk. ESCO Technologies is currently generating about 0.09 per unit of volatility. If you would invest 11,448 in ESCO Technologies on November 2, 2024 and sell it today you would earn a total of 1,653 from holding ESCO Technologies or generate 14.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vishay Precision Group vs. ESCO Technologies
Performance |
| Timeline |
| Vishay Precision |
| ESCO Technologies |
Vishay Precision and ESCO Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Precision and ESCO Technologies
The main advantage of trading using opposite Vishay Precision and ESCO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Precision position performs unexpectedly, ESCO Technologies 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 ESCO Technologies will offset losses from the drop in ESCO Technologies' long position.| Vishay Precision vs. ESCO Technologies | Vishay Precision vs. Genasys | Vishay Precision vs. Know Labs | Vishay Precision vs. Mesa Laboratories |
| ESCO Technologies vs. Novanta | ESCO Technologies vs. Sono Tek Corp | ESCO Technologies vs. Itron Inc | ESCO Technologies vs. Badger Meter |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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