Correlation Between Vishay Precision and CTS

Can any of the company-specific risk be diversified away by investing in both Vishay Precision and CTS 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 CTS 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 CTS Corporation, you can compare the effects of market volatilities on Vishay Precision and CTS 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 CTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Precision and CTS.

Diversification Opportunities for Vishay Precision and CTS

-0.52

Correlation Coefficient

Vishay Precision  CTS

Excellent diversification

The 3 months correlation between Vishay and CTS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Precision Group and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation 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 CTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Corporation has no effect on the direction of Vishay Precision i.e., Vishay Precision and CTS go up and down completely randomly.

Pair Corralation between Vishay Precision and CTS

Considering the 90-day investment horizon Vishay Precision Group is expected to generate 1.04 times more return on investment than CTS. However, Vishay Precision is 1.04 times more volatile than CTS Corporation. It trades about 0.4 of its potential returns per unit of risk. CTS Corporation is currently generating about 0.15 per unit of risk. If you would invest  2,165  in Vishay Precision Group on September 15, 2024 and sell it today you would earn a total of  293.00  from holding Vishay Precision Group or generate 13.53% return on investment over 90 days.

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

Vishay Precision Group  vs.  CTS Corp.

Vishay Precision

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vishay Precision Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Vishay Precision is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CTS Corporation

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CTS Corporation are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CTS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vishay Precision and CTS

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

The idea behind Vishay Precision Group and CTS Corporation 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.