Correlation Between Confluent and Vishay Intertechnology

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

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

Diversification Opportunities for Confluent and Vishay Intertechnology

0.82

Correlation Coefficient

Confluent  Vishay Intertechnology

Very poor diversification

The 3 months correlation between Confluent and Vishay is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Confluent and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology and Confluent 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 Confluent 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 Confluent i.e., Confluent and Vishay Intertechnology go up and down completely randomly.

Pair Corralation between Confluent and Vishay Intertechnology

Given the investment horizon of 90 days Confluent is expected to generate 2.66 times less return on investment than Vishay Intertechnology. In addition to that, Confluent is 1.18 times more volatile than Vishay Intertechnology. It trades about 0.12 of its total potential returns per unit of risk. Vishay Intertechnology is currently generating about 0.37 per unit of volatility. If you would invest  1,107  in Vishay Intertechnology on February 17, 2025 and sell it today you would earn a total of  420.00  from holding Vishay Intertechnology or generate 37.94% return on investment over 90 days.

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

Confluent  vs.  Vishay Intertechnology

Confluent

Risk-Adjusted Performance

Very Weak

Over the last 90 days Confluent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in June 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Vishay Intertechnology

Risk-Adjusted Performance

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 weak 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.

Pair Trading with Confluent and Vishay Intertechnology

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

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.