Correlation Between Vishay Intertechnology and Northstar Clean

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

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

Diversification Opportunities for Vishay Intertechnology and Northstar Clean

0.07

Correlation Coefficient

Vishay Intertechnology  Northstar Clean

Significant diversification

The 3 months correlation between Vishay and Northstar is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and Northstar Clean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northstar Clean Tech 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 Northstar Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northstar Clean Tech has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and Northstar Clean go up and down completely randomly.

Pair Corralation between Vishay Intertechnology and Northstar Clean

Considering the 90-day investment horizon Vishay Intertechnology is expected to generate 23.12 times less return on investment than Northstar Clean. But when comparing it to its historical volatility, Vishay Intertechnology is 1.45 times less risky than Northstar Clean. It trades about 0.0 of its potential returns per unit of risk. Northstar Clean Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  24.00  in Northstar Clean Technologies on December 22, 2024 and sell it today you would earn a total of  1.00  from holding Northstar Clean Technologies or generate 4.17% return on investment over 90 days.

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

Vishay Intertechnology  vs.  Northstar Clean Technologies

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.

Northstar Clean Tech

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Northstar Clean Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Northstar Clean may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Vishay Intertechnology and Northstar Clean

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

The idea behind Vishay Intertechnology and Northstar Clean Technologies 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.