Correlation Between Vishay Precision and Forrester Research

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

Diversification Opportunities for Vishay Precision and Forrester Research

0.67

Correlation Coefficient

Vishay Precision  Forrester Research

Poor diversification

The 3 months correlation between Vishay and Forrester is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Precision Group and Forrester Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forrester Research 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 Forrester Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forrester Research has no effect on the direction of Vishay Precision i.e., Vishay Precision and Forrester Research go up and down completely randomly.

Pair Corralation between Vishay Precision and Forrester Research

Considering the 90-day investment horizon Vishay Precision Group is expected to under-perform the Forrester Research. But the stock apears to be less risky and, when comparing its historical volatility, Vishay Precision Group is 1.04 times less risky than Forrester Research. The stock trades about -0.17 of its potential returns per unit of risk. The Forrester Research is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,601  in Forrester Research on August 13, 2024 and sell it today you would earn a total of  23.00  from holding Forrester Research or generate 1.44% return on investment over 90 days.

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

Vishay Precision Group  vs.  Forrester Research

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 weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Forrester Research

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forrester Research has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Vishay Precision and Forrester Research

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

The idea behind Vishay Precision Group and Forrester Research 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.