Correlation Between CARYSIL and Vishay Intertechnology

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

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

Diversification Opportunities for CARYSIL and Vishay Intertechnology

-0.05

Correlation Coefficient

CARYSIL  Vishay Intertechnology

Good diversification

The 3 months correlation between CARYSIL and Vishay is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding CARYSIL LIMITED and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology and CARYSIL 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 CARYSIL LIMITED 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 CARYSIL i.e., CARYSIL and Vishay Intertechnology go up and down completely randomly.

Pair Corralation between CARYSIL and Vishay Intertechnology

Assuming the 90 days trading horizon CARYSIL LIMITED is expected to under-perform the Vishay Intertechnology. But the stock apears to be less risky and, when comparing its historical volatility, CARYSIL LIMITED is 1.05 times less risky than Vishay Intertechnology. The stock trades about -0.22 of its potential returns per unit of risk. The Vishay Intertechnology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,189  in Vishay Intertechnology on February 5, 2024 and sell it today you would earn a total of  88.00  from holding Vishay Intertechnology or generate 4.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.36%
Values	Daily Returns

CARYSIL LIMITED  vs.  Vishay Intertechnology

CARYSIL LIMITED

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CARYSIL LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, CARYSIL is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Vishay Intertechnology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vishay Intertechnology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Vishay Intertechnology may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with CARYSIL and Vishay Intertechnology

The main advantage of trading using opposite CARYSIL and Vishay Intertechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARYSIL 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 CARYSIL LIMITED 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.