Correlation Between FLOW TRADERS and Vishay Intertechnology
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS and Vishay Intertechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and Vishay Intertechnology, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of Vishay Intertechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Vishay Intertechnology.
Diversification Opportunities for FLOW TRADERS and Vishay Intertechnology
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between FLOW and Vishay is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology and FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and Vishay Intertechnology go up and down completely randomly.
Pair Corralation between FLOW TRADERS and Vishay Intertechnology
Assuming the 90 days horizon FLOW TRADERS is expected to generate 30.18 times less return on investment than Vishay Intertechnology. But when comparing it to its historical volatility, FLOW TRADERS LTD is 3.38 times less risky than Vishay Intertechnology. It trades about 0.02 of its potential returns per unit of risk. Vishay Intertechnology is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,538 in Vishay Intertechnology on September 14, 2024 and sell it today you would earn a total of 173.00 from holding Vishay Intertechnology or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. Vishay Intertechnology
Performance |
| Timeline |
| FLOW TRADERS LTD |
| Vishay Intertechnology |
FLOW TRADERS and Vishay Intertechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and Vishay Intertechnology
The main advantage of trading using opposite FLOW TRADERS and Vishay Intertechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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.| FLOW TRADERS vs. Superior Plus Corp | FLOW TRADERS vs. SIVERS SEMICONDUCTORS AB | FLOW TRADERS vs. CHINA HUARONG ENERHD 50 | FLOW TRADERS vs. NORDIC HALIBUT AS |
| Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc |
Check out your portfolio center.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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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