Correlation Between Vishay Precision and Sensata Technologies
Can any of the company-specific risk be diversified away by investing in both Vishay Precision and Sensata 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 Sensata 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 Sensata Technologies Holding, you can compare the effects of market volatilities on Vishay Precision and Sensata 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 Sensata Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Precision and Sensata Technologies.
Diversification Opportunities for Vishay Precision and Sensata Technologies
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vishay and Sensata is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Precision Group and Sensata Technologies Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensata 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 Sensata Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensata Technologies has no effect on the direction of Vishay Precision i.e., Vishay Precision and Sensata Technologies go up and down completely randomly.
Pair Corralation between Vishay Precision and Sensata Technologies
Considering the 90-day investment horizon Vishay Precision Group is expected to under-perform the Sensata Technologies. In addition to that, Vishay Precision is 1.16 times more volatile than Sensata Technologies Holding. It trades about -0.1 of its total potential returns per unit of risk. Sensata Technologies Holding is currently generating about -0.01 per unit of volatility. If you would invest 3,408 in Sensata Technologies Holding on August 27, 2024 and sell it today you would lose (219.00) from holding Sensata Technologies Holding or give up 6.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vishay Precision Group vs. Sensata Technologies Holding
Performance |
| Timeline |
| Vishay Precision |
| Sensata Technologies |
Vishay Precision and Sensata Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Precision and Sensata Technologies
The main advantage of trading using opposite Vishay Precision and Sensata Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Precision position performs unexpectedly, Sensata 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 Sensata Technologies will offset losses from the drop in Sensata Technologies' long position.| Vishay Precision vs. Spectris plc | Vishay Precision vs. Mesa Laboratories | Vishay Precision vs. ESCO Technologies | Vishay Precision vs. Focus Universal |
| Sensata Technologies vs. Cepton Inc | Sensata Technologies vs. SaverOne 2014 Ltd | Sensata Technologies vs. Kraken Robotics | Sensata Technologies vs. Focus Universal |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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