Correlation Between Vishay Precision and NSTAR Electric
Can any of the company-specific risk be diversified away by investing in both Vishay Precision and NSTAR Electric 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 NSTAR Electric 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 NSTAR Electric, you can compare the effects of market volatilities on Vishay Precision and NSTAR Electric 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 NSTAR Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Precision and NSTAR Electric.
Diversification Opportunities for Vishay Precision and NSTAR Electric
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vishay and NSTAR is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Precision Group and NSTAR Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR Electric 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 NSTAR Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTAR Electric has no effect on the direction of Vishay Precision i.e., Vishay Precision and NSTAR Electric go up and down completely randomly.
Pair Corralation between Vishay Precision and NSTAR Electric
Considering the 90-day investment horizon Vishay Precision Group is expected to under-perform the NSTAR Electric. In addition to that, Vishay Precision is 1.59 times more volatile than NSTAR Electric. It trades about -0.04 of its total potential returns per unit of risk. NSTAR Electric is currently generating about 0.05 per unit of volatility. If you would invest 7,524 in NSTAR Electric on September 14, 2024 and sell it today you would earn a total of 876.00 from holding NSTAR Electric or generate 11.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 73.9% |
| Values | Daily Returns |
Vishay Precision Group vs. NSTAR Electric
Performance |
| Timeline |
| Vishay Precision |
| NSTAR Electric |
Vishay Precision and NSTAR Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Precision and NSTAR Electric
The main advantage of trading using opposite Vishay Precision and NSTAR Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Precision position performs unexpectedly, NSTAR Electric 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 NSTAR Electric will offset losses from the drop in NSTAR Electric's long position.| Vishay Precision vs. Spectris plc | Vishay Precision vs. Mesa Laboratories | Vishay Precision vs. ESCO Technologies | Vishay Precision vs. Focus Universal |
| NSTAR Electric vs. Willamette Valley Vineyards | NSTAR Electric vs. Aeye Inc | NSTAR Electric vs. SNDL Inc | NSTAR Electric vs. Anheuser Busch Inbev |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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