Correlation Between Vishay Intertechnology and Sankyo

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

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

Diversification Opportunities for Vishay Intertechnology and Sankyo

0.25

Correlation Coefficient

Vishay Intertechnology  Sankyo

Modest diversification

The 3 months correlation between Vishay and Sankyo is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and Sankyo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sankyo 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 Sankyo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sankyo has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and Sankyo go up and down completely randomly.

Pair Corralation between Vishay Intertechnology and Sankyo

Assuming the 90 days trading horizon Vishay Intertechnology is expected to generate 2.24 times less return on investment than Sankyo. In addition to that, Vishay Intertechnology is 1.66 times more volatile than Sankyo Co. It trades about 0.01 of its total potential returns per unit of risk. Sankyo Co is currently generating about 0.05 per unit of volatility. If you would invest  1,210  in Sankyo Co on October 26, 2024 and sell it today you would earn a total of  50.00  from holding Sankyo Co or generate 4.13% return on investment over 90 days.

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

Vishay Intertechnology  vs.  Sankyo Co

Vishay Intertechnology

Risk-Adjusted Performance

0 of 100

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.

Sankyo

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sankyo Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Sankyo is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Vishay Intertechnology and Sankyo

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

The idea behind Vishay Intertechnology and Sankyo Co 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.