Correlation Between Vishay Precision and Coherent

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

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

Diversification Opportunities for Vishay Precision and Coherent

0.28

Correlation Coefficient

Vishay Precision  Coherent

Modest diversification

The 3 months correlation between Vishay and Coherent is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Precision Group and Coherent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coherent and Vishay Precision 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 Precision Group are associated (or correlated) with Coherent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coherent has no effect on the direction of Vishay Precision i.e., Vishay Precision and Coherent go up and down completely randomly.

Pair Corralation between Vishay Precision and Coherent

Considering the 90-day investment horizon Vishay Precision Group is expected to generate 0.48 times more return on investment than Coherent. However, Vishay Precision Group is 2.09 times less risky than Coherent. It trades about 0.06 of its potential returns per unit of risk. Coherent is currently generating about -0.08 per unit of risk. If you would invest  2,323  in Vishay Precision Group on December 29, 2024 and sell it today you would earn a total of  154.00  from holding Vishay Precision Group or generate 6.63% return on investment over 90 days.

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

Vishay Precision Group  vs.  Coherent

Vishay Precision

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vishay Precision Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Vishay Precision may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Coherent

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coherent has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Vishay Precision and Coherent

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

The idea behind Vishay Precision Group and Coherent 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.