Correlation Between Vishay Intertechnology and EON SE

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

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

Diversification Opportunities for Vishay Intertechnology and EON SE

0.45

Correlation Coefficient

Vishay Intertechnology  EON SE

Very weak diversification

The 3 months correlation between Vishay and EON is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and EON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON SE 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 EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and EON SE go up and down completely randomly.

Pair Corralation between Vishay Intertechnology and EON SE

Assuming the 90 days trading horizon Vishay Intertechnology is expected to under-perform the EON SE. In addition to that, Vishay Intertechnology is 1.8 times more volatile than EON SE. It trades about -0.03 of its total potential returns per unit of risk. EON SE is currently generating about 0.0 per unit of volatility. If you would invest  1,211  in EON SE on November 28, 2024 and sell it today you would lose (4.00) from holding EON SE or give up 0.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Vishay Intertechnology  vs.  EON SE

Vishay Intertechnology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vishay Intertechnology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vishay Intertechnology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

EON SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days EON SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, EON SE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Vishay Intertechnology and EON SE

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

The idea behind Vishay Intertechnology and EON SE 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 CEOs Directory module to screen CEOs from public companies around the world.