Correlation Between Vishay Intertechnology and Oracle Power

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

By analyzing existing cross correlation between Vishay Intertechnology and Oracle Power plc, you can compare the effects of market volatilities on Vishay Intertechnology and Oracle Power 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 Oracle Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Intertechnology and Oracle Power.

Diversification Opportunities for Vishay Intertechnology and Oracle Power

-0.09

Correlation Coefficient

Vishay Intertechnology  Oracle Power

Good diversification

The 3 months correlation between Vishay and Oracle is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and Oracle Power plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle Power plc 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 Oracle Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oracle Power plc has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and Oracle Power go up and down completely randomly.

Pair Corralation between Vishay Intertechnology and Oracle Power

Assuming the 90 days trading horizon Vishay Intertechnology is expected to under-perform the Oracle Power. But the stock apears to be less risky and, when comparing its historical volatility, Vishay Intertechnology is 18.97 times less risky than Oracle Power. The stock trades about -0.19 of its potential returns per unit of risk. The Oracle Power plc is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  0.05  in Oracle Power plc on October 10, 2024 and sell it today you would earn a total of  0.05  from holding Oracle Power plc or generate 100.0% 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.  Oracle Power plc

Vishay Intertechnology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vishay Intertechnology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Vishay Intertechnology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Oracle Power plc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oracle Power plc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Oracle Power unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vishay Intertechnology and Oracle Power

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

The idea behind Vishay Intertechnology and Oracle Power plc 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.