Correlation Between Vishay Precision and Niagara Mohawk
Can any of the company-specific risk be diversified away by investing in both Vishay Precision and Niagara Mohawk 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 Niagara Mohawk 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 Niagara Mohawk Power, you can compare the effects of market volatilities on Vishay Precision and Niagara Mohawk 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 Niagara Mohawk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Precision and Niagara Mohawk.
Diversification Opportunities for Vishay Precision and Niagara Mohawk
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vishay and Niagara is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Precision Group and Niagara Mohawk Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niagara Mohawk Power 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 Niagara Mohawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niagara Mohawk Power has no effect on the direction of Vishay Precision i.e., Vishay Precision and Niagara Mohawk go up and down completely randomly.
Pair Corralation between Vishay Precision and Niagara Mohawk
Considering the 90-day investment horizon Vishay Precision Group is expected to generate 0.95 times more return on investment than Niagara Mohawk. However, Vishay Precision Group is 1.05 times less risky than Niagara Mohawk. It trades about 0.34 of its potential returns per unit of risk. Niagara Mohawk Power is currently generating about -0.29 per unit of risk. If you would invest 2,194 in Vishay Precision Group on September 13, 2024 and sell it today you would earn a total of 264.00 from holding Vishay Precision Group or generate 12.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vishay Precision Group vs. Niagara Mohawk Power
Performance |
| Timeline |
| Vishay Precision |
| Niagara Mohawk Power |
Vishay Precision and Niagara Mohawk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Precision and Niagara Mohawk
The main advantage of trading using opposite Vishay Precision and Niagara Mohawk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Precision position performs unexpectedly, Niagara Mohawk 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 Niagara Mohawk will offset losses from the drop in Niagara Mohawk's long position.| Vishay Precision vs. Mesa Laboratories | Vishay Precision vs. Itron Inc | Vishay Precision vs. Fortive Corp | Vishay Precision vs. ESCO Technologies |
| Niagara Mohawk vs. Vishay Precision Group | Niagara Mohawk vs. Qualys Inc | Niagara Mohawk vs. NetSol Technologies | Niagara Mohawk vs. United Microelectronics |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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