Correlation Between Vishay Intertechnology and NVE

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

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

Diversification Opportunities for Vishay Intertechnology and NVE

-0.02

Correlation Coefficient

Vishay Intertechnology  NVE

Good diversification

The 3 months correlation between Vishay and NVE is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and NVE Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVE Corporation 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 NVE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVE Corporation has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and NVE go up and down completely randomly.

Pair Corralation between Vishay Intertechnology and NVE

Considering the 90-day investment horizon Vishay Intertechnology is expected to generate 1.06 times more return on investment than NVE. However, Vishay Intertechnology is 1.06 times more volatile than NVE Corporation. It trades about 0.0 of its potential returns per unit of risk. NVE Corporation is currently generating about -0.11 per unit of risk. If you would invest  1,737  in Vishay Intertechnology on December 27, 2024 and sell it today you would lose (41.00) from holding Vishay Intertechnology or give up 2.36% of portfolio value over 90 days.

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

Vishay Intertechnology  vs.  NVE Corp.

Vishay Intertechnology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vishay Intertechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Vishay Intertechnology is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

NVE Corporation

Risk-Adjusted Performance

Very Weak

Over the last 90 days NVE Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Vishay Intertechnology and NVE

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

The idea behind Vishay Intertechnology and NVE 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.