Correlation Between Vishay Precision and Spectris Plc

Can any of the company-specific risk be diversified away by investing in both Vishay Precision and Spectris Plc 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 Spectris Plc 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 Spectris plc, you can compare the effects of market volatilities on Vishay Precision and Spectris Plc 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 Spectris Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Precision and Spectris Plc.

Diversification Opportunities for Vishay Precision and Spectris Plc

0.42

Correlation Coefficient

Vishay Precision  Spectris Plc

Very weak diversification

The 3 months correlation between Vishay and Spectris is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Precision Group and Spectris plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectris plc 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 Spectris Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectris plc has no effect on the direction of Vishay Precision i.e., Vishay Precision and Spectris Plc go up and down completely randomly.

Pair Corralation between Vishay Precision and Spectris Plc

Considering the 90-day investment horizon Vishay Precision is expected to generate 2.83 times less return on investment than Spectris Plc. But when comparing it to its historical volatility, Vishay Precision Group is 1.32 times less risky than Spectris Plc. It trades about 0.05 of its potential returns per unit of risk. Spectris plc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,037  in Spectris plc on March 23, 2025 and sell it today you would earn a total of  1,442  from holding Spectris plc or generate 47.48% return on investment over 90 days.

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

Vishay Precision Group  vs.  Spectris plc

Vishay Precision

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vishay Precision Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vishay Precision reported solid returns over the last few months and may actually be approaching a breakup point.

Spectris plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Spectris plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting forward-looking indicators, Spectris Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vishay Precision and Spectris Plc

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

The idea behind Vishay Precision Group and Spectris plc 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.