Correlation Between Vishay Intertechnology and Raphael Pharmaceutical

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

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

Diversification Opportunities for Vishay Intertechnology and Raphael Pharmaceutical

0.29

Correlation Coefficient

Vishay Intertechnology  Raphael Pharmaceutical

Modest diversification

The 3 months correlation between Vishay and Raphael is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and Raphael Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raphael Pharmaceutical 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 Raphael Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raphael Pharmaceutical has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and Raphael Pharmaceutical go up and down completely randomly.

Pair Corralation between Vishay Intertechnology and Raphael Pharmaceutical

Considering the 90-day investment horizon Vishay Intertechnology is expected to under-perform the Raphael Pharmaceutical. But the stock apears to be less risky and, when comparing its historical volatility, Vishay Intertechnology is 4.76 times less risky than Raphael Pharmaceutical. The stock trades about -0.01 of its potential returns per unit of risk. The Raphael Pharmaceutical is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  250.00  in Raphael Pharmaceutical on October 10, 2024 and sell it today you would lose (210.00) from holding Raphael Pharmaceutical or give up 84.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Vishay Intertechnology  vs.  Raphael Pharmaceutical

Vishay Intertechnology

Risk-Adjusted Performance

0 of 100

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.

Raphael Pharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raphael Pharmaceutical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Vishay Intertechnology and Raphael Pharmaceutical

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

The idea behind Vishay Intertechnology and Raphael Pharmaceutical 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.