Correlation Between Vishay Intertechnology and INGERSOLL

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

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

Diversification Opportunities for Vishay Intertechnology and INGERSOLL

0.07

Correlation Coefficient

Vishay Intertechnology  INGERSOLL

Significant diversification

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

Pair Corralation between Vishay Intertechnology and INGERSOLL

Considering the 90-day investment horizon Vishay Intertechnology is expected to generate 8.18 times more return on investment than INGERSOLL. However, Vishay Intertechnology is 8.18 times more volatile than INGERSOLL RAND LUXEMBOURG FINANCE. It trades about 0.07 of its potential returns per unit of risk. INGERSOLL RAND LUXEMBOURG FINANCE is currently generating about -0.33 per unit of risk. If you would invest  1,704  in Vishay Intertechnology on September 25, 2024 and sell it today you would earn a total of  50.00  from holding Vishay Intertechnology or generate 2.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Vishay Intertechnology  vs.  INGERSOLL RAND LUXEMBOURG FINA

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 recent stock price confusion, may contribute to short-horizon losses for the traders.

INGERSOLL RAND LUXEM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INGERSOLL RAND LUXEMBOURG FINANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INGERSOLL is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vishay Intertechnology and INGERSOLL

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

The idea behind Vishay Intertechnology and INGERSOLL RAND LUXEMBOURG FINANCE 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.