Correlation Between Vulcan Materials and Vishay Intertechnology

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

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

Diversification Opportunities for Vulcan Materials and Vishay Intertechnology

0.2

Correlation Coefficient

Vulcan Materials  Vishay Intertechnology

Modest diversification

The 3 months correlation between Vulcan and Vishay is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology and Vulcan Materials 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 Vulcan Materials 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 Vulcan Materials i.e., Vulcan Materials and Vishay Intertechnology go up and down completely randomly.

Pair Corralation between Vulcan Materials and Vishay Intertechnology

Assuming the 90 days horizon Vulcan Materials is expected to generate 8.96 times less return on investment than Vishay Intertechnology. But when comparing it to its historical volatility, Vulcan Materials is 1.99 times less risky than Vishay Intertechnology. It trades about 0.04 of its potential returns per unit of risk. Vishay Intertechnology is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,015  in Vishay Intertechnology on April 24, 2025 and sell it today you would earn a total of  470.00  from holding Vishay Intertechnology or generate 46.31% return on investment over 90 days.

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

Vulcan Materials  vs.  Vishay Intertechnology

Vulcan Materials

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vulcan Materials are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Vulcan Materials is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Vishay Intertechnology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vishay Intertechnology are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Vishay Intertechnology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vulcan Materials and Vishay Intertechnology

The main advantage of trading using opposite Vulcan Materials and Vishay Intertechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials 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 Vulcan Materials 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.