Correlation Between Vishay Intertechnology and Magna International
Can any of the company-specific risk be diversified away by investing in both Vishay Intertechnology and Magna International 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 Intertechnology and Magna International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vishay Intertechnology and Magna International, you can compare the effects of market volatilities on Vishay Intertechnology and Magna International 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 Intertechnology with a short position of Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Intertechnology and Magna International.
Diversification Opportunities for Vishay Intertechnology and Magna International
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vishay and Magna is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International and Vishay Intertechnology 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 Intertechnology are associated (or correlated) with Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and Magna International go up and down completely randomly.
Pair Corralation between Vishay Intertechnology and Magna International
Considering the 90-day investment horizon Vishay Intertechnology is expected to generate 1.43 times more return on investment than Magna International. However, Vishay Intertechnology is 1.43 times more volatile than Magna International. It trades about 0.24 of its potential returns per unit of risk. Magna International is currently generating about -0.04 per unit of risk. If you would invest 1,515 in Vishay Intertechnology on September 20, 2024 and sell it today you would earn a total of 223.00 from holding Vishay Intertechnology or generate 14.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vishay Intertechnology vs. Magna International
Performance |
| Timeline |
| Vishay Intertechnology |
| Magna International |
Vishay Intertechnology and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Intertechnology and Magna International
The main advantage of trading using opposite Vishay Intertechnology and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Intertechnology position performs unexpectedly, Magna International 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 Magna International will offset losses from the drop in Magna International's long position.| Vishay Intertechnology vs. IONQ Inc | Vishay Intertechnology vs. Quantum | Vishay Intertechnology vs. Super Micro Computer | Vishay Intertechnology vs. Red Cat Holdings |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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