Correlation Between Flex and Vishay Intertechnology
Can any of the company-specific risk be diversified away by investing in both Flex and Vishay Intertechnology 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 Flex and Vishay Intertechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flex and Vishay Intertechnology, you can compare the effects of market volatilities on Flex and Vishay Intertechnology 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 Flex with a short position of Vishay Intertechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flex and Vishay Intertechnology.
Diversification Opportunities for Flex and Vishay Intertechnology
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Flex and Vishay is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Flex and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology and Flex 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 Flex are associated (or correlated) with Vishay Intertechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Intertechnology has no effect on the direction of Flex i.e., Flex and Vishay Intertechnology go up and down completely randomly.
Pair Corralation between Flex and Vishay Intertechnology
Given the investment horizon of 90 days Flex is expected to generate 1.19 times less return on investment than Vishay Intertechnology. In addition to that, Flex is 1.07 times more volatile than Vishay Intertechnology. It trades about 0.03 of its total potential returns per unit of risk. Vishay Intertechnology is currently generating about 0.04 per unit of volatility. If you would invest 2,174 in Vishay Intertechnology on January 25, 2024 and sell it today you would earn a total of 54.00 from holding Vishay Intertechnology or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flex vs. Vishay Intertechnology
Performance |
| Timeline |
| Flex |
| Vishay Intertechnology |
Flex and Vishay Intertechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flex and Vishay Intertechnology
The main advantage of trading using opposite Flex and Vishay Intertechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flex position performs unexpectedly, Vishay Intertechnology 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 Vishay Intertechnology will offset losses from the drop in Vishay Intertechnology's long position.The idea behind Flex and Vishay Intertechnology 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.| Vishay Intertechnology vs. Silicon Laboratories | Vishay Intertechnology vs. Diodes Incorporated | Vishay Intertechnology vs. MACOM Technology Solutions | Vishay Intertechnology vs. FormFactor |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Stocks Directory Find actively traded stocks across global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |