Correlation Between Nanalysis Scientific and Vishay Precision

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

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

Diversification Opportunities for Nanalysis Scientific and Vishay Precision

0.61

Correlation Coefficient

Nanalysis Scientific  Vishay Precision

Poor diversification

The 3 months correlation between Nanalysis and Vishay is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nanalysis Scientific Corp and Vishay Precision Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Precision and Nanalysis Scientific 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 Nanalysis Scientific Corp are associated (or correlated) with Vishay Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Precision has no effect on the direction of Nanalysis Scientific i.e., Nanalysis Scientific and Vishay Precision go up and down completely randomly.

Pair Corralation between Nanalysis Scientific and Vishay Precision

Assuming the 90 days horizon Nanalysis Scientific Corp is expected to under-perform the Vishay Precision. In addition to that, Nanalysis Scientific is 2.24 times more volatile than Vishay Precision Group. It trades about -0.06 of its total potential returns per unit of risk. Vishay Precision Group is currently generating about -0.07 per unit of volatility. If you would invest  2,665  in Vishay Precision Group on September 4, 2024 and sell it today you would lose (305.00) from holding Vishay Precision Group or give up 11.44% of portfolio value over 90 days.

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

Nanalysis Scientific Corp  vs.  Vishay Precision Group

Nanalysis Scientific Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nanalysis Scientific Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Vishay Precision

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vishay Precision Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Nanalysis Scientific and Vishay Precision

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

The idea behind Nanalysis Scientific Corp and Vishay Precision 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.