Correlation Between Vishay Intertechnology and Sun Life

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

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

Diversification Opportunities for Vishay Intertechnology and Sun Life

0.38

Correlation Coefficient

Vishay Intertechnology  Sun Life

Weak diversification

The 3 months correlation between Vishay and Sun is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and Sun Life go up and down completely randomly.

Pair Corralation between Vishay Intertechnology and Sun Life

Considering the 90-day investment horizon Vishay Intertechnology is expected to generate 1.58 times more return on investment than Sun Life. However, Vishay Intertechnology is 1.58 times more volatile than Sun Life Financial. It trades about 0.02 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.02 per unit of risk. If you would invest  1,829  in Vishay Intertechnology on January 20, 2024 and sell it today you would earn a total of  261.00  from holding Vishay Intertechnology or generate 14.27% return on investment over 90 days.

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

Vishay Intertechnology  vs.  Sun Life Financial

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 latest uncertain performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Sun Life Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sun Life Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Sun Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Vishay Intertechnology and Sun Life

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

The idea behind Vishay Intertechnology and Sun Life Financial 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.