Correlation Between 191216CV0 and Vishay Precision

Can any of the company-specific risk be diversified away by investing in both 191216CV0 and Vishay Precision 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 191216CV0 and Vishay Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COCA COLA CO and Vishay Precision Group, you can compare the effects of market volatilities on 191216CV0 and Vishay Precision 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 191216CV0 with a short position of Vishay Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of 191216CV0 and Vishay Precision.

Diversification Opportunities for 191216CV0 and Vishay Precision

-0.13

Correlation Coefficient

191216CV0  Vishay Precision

Good diversification

The 3 months correlation between 191216CV0 and Vishay is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding COCA COLA CO and Vishay Precision Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Precision and 191216CV0 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 COCA COLA CO are associated (or correlated) with Vishay Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Precision has no effect on the direction of 191216CV0 i.e., 191216CV0 and Vishay Precision go up and down completely randomly.

Pair Corralation between 191216CV0 and Vishay Precision

Assuming the 90 days trading horizon 191216CV0 is expected to generate 5.22 times less return on investment than Vishay Precision. In addition to that, 191216CV0 is 1.68 times more volatile than Vishay Precision Group. It trades about 0.01 of its total potential returns per unit of risk. Vishay Precision Group is currently generating about 0.1 per unit of volatility. If you would invest  2,133  in Vishay Precision Group on October 17, 2024 and sell it today you would earn a total of  131.00  from holding Vishay Precision Group or generate 6.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

COCA COLA CO  vs.  Vishay Precision Group

COCA A CO

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days COCA COLA CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 191216CV0 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Vishay Precision

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vishay Precision Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with 191216CV0 and Vishay Precision

The main advantage of trading using opposite 191216CV0 and Vishay Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 191216CV0 position performs unexpectedly, Vishay Precision 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 Precision will offset losses from the drop in Vishay Precision's long position.

The idea behind COCA COLA CO and Vishay Precision Group 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.