Correlation Between Vishay Precision and Track

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

Diversification Opportunities for Vishay Precision and Track

-0.4

Correlation Coefficient

Vishay Precision  Track

Very good diversification

The 3 months correlation between Vishay and Track is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Precision Group and Track Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Track Group 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 Track. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Track Group has no effect on the direction of Vishay Precision i.e., Vishay Precision and Track go up and down completely randomly.

Pair Corralation between Vishay Precision and Track

Considering the 90-day investment horizon Vishay Precision is expected to generate 24.01 times less return on investment than Track. But when comparing it to its historical volatility, Vishay Precision Group is 3.3 times less risky than Track. It trades about 0.02 of its potential returns per unit of risk. Track Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Track Group on December 27, 2024 and sell it today you would earn a total of  8.00  from holding Track Group or generate 47.06% 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.  Track Group

Vishay Precision

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vishay Precision Group are ranked lower than 1 (%) 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.

Track Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Track Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile fundamental indicators, Track disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vishay Precision and Track

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

The idea behind Vishay Precision Group and Track Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.