Correlation Between Vishay Intertechnology and M Tron

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

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

Diversification Opportunities for Vishay Intertechnology and M Tron

-0.56

Correlation Coefficient

Vishay Intertechnology  M Tron

Excellent diversification

The 3 months correlation between Vishay and MPTI is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and M tron Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M tron Industries 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 M Tron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M tron Industries has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and M Tron go up and down completely randomly.

Pair Corralation between Vishay Intertechnology and M Tron

Considering the 90-day investment horizon Vishay Intertechnology is expected to generate 1.96 times less return on investment than M Tron. But when comparing it to its historical volatility, Vishay Intertechnology is 1.31 times less risky than M Tron. It trades about 0.19 of its potential returns per unit of risk. M tron Industries is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  5,220  in M tron Industries on September 3, 2024 and sell it today you would earn a total of  1,336  from holding M tron Industries or generate 25.59% return on investment over 90 days.

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

Vishay Intertechnology  vs.  M tron Industries

Vishay Intertechnology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vishay Intertechnology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Vishay Intertechnology is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

M tron Industries

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in M tron Industries are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, M Tron demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vishay Intertechnology and M Tron

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

The idea behind Vishay Intertechnology and M tron Industries 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.