Correlation Between Vishay Intertechnology and Teradyne
Can any of the company-specific risk be diversified away by investing in both Vishay Intertechnology and Teradyne 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 Teradyne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vishay Intertechnology and Teradyne, you can compare the effects of market volatilities on Vishay Intertechnology and Teradyne 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 Teradyne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Intertechnology and Teradyne.
Diversification Opportunities for Vishay Intertechnology and Teradyne
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vishay and Teradyne is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and Teradyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradyne 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 Teradyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradyne has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and Teradyne go up and down completely randomly.
Pair Corralation between Vishay Intertechnology and Teradyne
Considering the 90-day investment horizon Vishay Intertechnology is expected to under-perform the Teradyne. But the stock apears to be less risky and, when comparing its historical volatility, Vishay Intertechnology is 1.35 times less risky than Teradyne. The stock trades about -0.04 of its potential returns per unit of risk. The Teradyne is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10,436 in Teradyne on September 1, 2024 and sell it today you would earn a total of 564.00 from holding Teradyne or generate 5.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vishay Intertechnology vs. Teradyne
Performance |
| Timeline |
| Vishay Intertechnology |
| Teradyne |
Vishay Intertechnology and Teradyne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Intertechnology and Teradyne
The main advantage of trading using opposite Vishay Intertechnology and Teradyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Intertechnology position performs unexpectedly, Teradyne 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 Teradyne will offset losses from the drop in Teradyne's long position.| Vishay Intertechnology vs. Desktop Metal | Vishay Intertechnology vs. Fabrinet | Vishay Intertechnology vs. Knowles Cor | Vishay Intertechnology vs. Ubiquiti Networks |
| Teradyne vs. IPG Photonics | Teradyne vs. Ultra Clean Holdings | Teradyne vs. Onto Innovation | Teradyne vs. Cohu Inc |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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