Correlation Between Vishay Precision and Know Labs

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

Diversification Opportunities for Vishay Precision and Know Labs

0.57

Correlation Coefficient

Vishay Precision  Know Labs

Very weak diversification

The 3 months correlation between Vishay and Know is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Precision Group and Know Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Know Labs 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 Know Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Know Labs has no effect on the direction of Vishay Precision i.e., Vishay Precision and Know Labs go up and down completely randomly.

Pair Corralation between Vishay Precision and Know Labs

Considering the 90-day investment horizon Vishay Precision Group is expected to under-perform the Know Labs. But the stock apears to be less risky and, when comparing its historical volatility, Vishay Precision Group is 2.17 times less risky than Know Labs. The stock trades about -0.12 of its potential returns per unit of risk. The Know Labs is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  29.00  in Know Labs on August 30, 2024 and sell it today you would lose (5.00) from holding Know Labs or give up 17.24% of portfolio value over 90 days.

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

Vishay Precision Group  vs.  Know Labs

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.

Know Labs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Know Labs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Vishay Precision and Know Labs

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

The idea behind Vishay Precision Group and Know Labs 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 Correlations module to find global opportunities by holding instruments from different markets.