Correlation Between Vishay Intertechnology and DSP

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

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

Diversification Opportunities for Vishay Intertechnology and DSP

0.0

Correlation Coefficient

Vishay Intertechnology  DSP

Pay attention - limited upside

The 3 months correlation between Vishay and DSP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and DSP Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSP Group 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 DSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSP Group has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and DSP go up and down completely randomly.

Pair Corralation between Vishay Intertechnology and DSP

If you would invest  1,935  in Vishay Intertechnology on February 15, 2024 and sell it today you would earn a total of  398.00  from holding Vishay Intertechnology or generate 20.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Vishay Intertechnology  vs.  DSP Group

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 strong basic indicators, Vishay Intertechnology is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

DSP Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vishay Intertechnology and DSP

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

The idea behind Vishay Intertechnology and DSP Group 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.