Correlation Between DATAGROUP and Vishay Intertechnology

Can any of the company-specific risk be diversified away by investing in both DATAGROUP and Vishay Intertechnology 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 DATAGROUP and Vishay Intertechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DATAGROUP SE and Vishay Intertechnology, you can compare the effects of market volatilities on DATAGROUP and Vishay Intertechnology 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 DATAGROUP with a short position of Vishay Intertechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATAGROUP and Vishay Intertechnology.

Diversification Opportunities for DATAGROUP and Vishay Intertechnology

0.07

Correlation Coefficient

DATAGROUP  Vishay Intertechnology

Significant diversification

The 3 months correlation between DATAGROUP and Vishay is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding DATAGROUP SE and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology and DATAGROUP 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 DATAGROUP SE are associated (or correlated) with Vishay Intertechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Intertechnology has no effect on the direction of DATAGROUP i.e., DATAGROUP and Vishay Intertechnology go up and down completely randomly.

Pair Corralation between DATAGROUP and Vishay Intertechnology

Assuming the 90 days trading horizon DATAGROUP SE is expected to generate 0.96 times more return on investment than Vishay Intertechnology. However, DATAGROUP SE is 1.04 times less risky than Vishay Intertechnology. It trades about 0.11 of its potential returns per unit of risk. Vishay Intertechnology is currently generating about 0.07 per unit of risk. If you would invest  3,970  in DATAGROUP SE on September 5, 2024 and sell it today you would earn a total of  680.00  from holding DATAGROUP SE or generate 17.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

DATAGROUP SE  vs.  Vishay Intertechnology

DATAGROUP SE

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DATAGROUP SE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical indicators, DATAGROUP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Vishay Intertechnology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vishay Intertechnology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Vishay Intertechnology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with DATAGROUP and Vishay Intertechnology

The main advantage of trading using opposite DATAGROUP and Vishay Intertechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATAGROUP position performs unexpectedly, Vishay Intertechnology 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 Vishay Intertechnology will offset losses from the drop in Vishay Intertechnology's long position.

The idea behind DATAGROUP SE and Vishay Intertechnology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.