Correlation Between Vishay Intertechnology and Modine Manufacturing
Can any of the company-specific risk be diversified away by investing in both Vishay Intertechnology and Modine Manufacturing 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 Modine Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vishay Intertechnology and Modine Manufacturing, you can compare the effects of market volatilities on Vishay Intertechnology and Modine Manufacturing 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 Modine Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Intertechnology and Modine Manufacturing.
Diversification Opportunities for Vishay Intertechnology and Modine Manufacturing
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vishay and Modine is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and Modine Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modine Manufacturing 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 Modine Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modine Manufacturing has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and Modine Manufacturing go up and down completely randomly.
Pair Corralation between Vishay Intertechnology and Modine Manufacturing
Considering the 90-day investment horizon Vishay Intertechnology is expected to generate 0.94 times more return on investment than Modine Manufacturing. However, Vishay Intertechnology is 1.06 times less risky than Modine Manufacturing. It trades about 0.24 of its potential returns per unit of risk. Modine Manufacturing is currently generating about -0.08 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vishay Intertechnology vs. Modine Manufacturing
Performance |
| Timeline |
| Vishay Intertechnology |
| Modine Manufacturing |
Vishay Intertechnology and Modine Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Intertechnology and Modine Manufacturing
The main advantage of trading using opposite Vishay Intertechnology and Modine Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Intertechnology position performs unexpectedly, Modine Manufacturing 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 Modine Manufacturing will offset losses from the drop in Modine Manufacturing's long position.| Vishay Intertechnology vs. IONQ Inc | Vishay Intertechnology vs. Quantum | Vishay Intertechnology vs. Super Micro Computer | Vishay Intertechnology vs. Red Cat Holdings |
| Modine Manufacturing vs. Ford Motor | Modine Manufacturing vs. General Motors | Modine Manufacturing vs. Goodyear Tire Rubber | Modine Manufacturing vs. Li Auto |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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