Correlation Between Vishay Precision and Novanta
Can any of the company-specific risk be diversified away by investing in both Vishay Precision and Novanta 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 Precision and Novanta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vishay Precision Group and Novanta, you can compare the effects of market volatilities on Vishay Precision and Novanta 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 Precision with a short position of Novanta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Precision and Novanta.
Diversification Opportunities for Vishay Precision and Novanta
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vishay and Novanta is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Precision Group and Novanta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novanta and Vishay Precision 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 Precision Group are associated (or correlated) with Novanta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novanta has no effect on the direction of Vishay Precision i.e., Vishay Precision and Novanta go up and down completely randomly.
Pair Corralation between Vishay Precision and Novanta
Considering the 90-day investment horizon Vishay Precision Group is expected to under-perform the Novanta. In addition to that, Vishay Precision is 1.57 times more volatile than Novanta. It trades about -0.03 of its total potential returns per unit of risk. Novanta is currently generating about 0.03 per unit of volatility. If you would invest 16,114 in Novanta on March 5, 2024 and sell it today you would earn a total of 102.00 from holding Novanta or generate 0.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Vishay Precision Group vs. Novanta
Performance |
Timeline |
Vishay Precision |
Novanta |
Vishay Precision and Novanta Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vishay Precision and Novanta
The main advantage of trading using opposite Vishay Precision and Novanta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Precision position performs unexpectedly, Novanta 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 Novanta will offset losses from the drop in Novanta's long position.Vishay Precision vs. Scientific Industries | Vishay Precision vs. Nanalysis Scientific Corp | Vishay Precision vs. DSG Global | Vishay Precision vs. ESCO Technologies |
Novanta vs. Scientific Industries | Novanta vs. Nanalysis Scientific Corp | Novanta vs. DSG Global | Novanta vs. ESCO Technologies |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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