Correlation Between Vishay Intertechnology and Wenzhou Kangning
Can any of the company-specific risk be diversified away by investing in both Vishay Intertechnology and Wenzhou Kangning 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 Intertechnology and Wenzhou Kangning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vishay Intertechnology and Wenzhou Kangning Hospital, you can compare the effects of market volatilities on Vishay Intertechnology and Wenzhou Kangning 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 Intertechnology with a short position of Wenzhou Kangning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Intertechnology and Wenzhou Kangning.
Diversification Opportunities for Vishay Intertechnology and Wenzhou Kangning
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Vishay and Wenzhou is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and Wenzhou Kangning Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Kangning Hospital and Vishay Intertechnology 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 Intertechnology are associated (or correlated) with Wenzhou Kangning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Kangning Hospital has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and Wenzhou Kangning go up and down completely randomly.
Pair Corralation between Vishay Intertechnology and Wenzhou Kangning
Assuming the 90 days trading horizon Vishay Intertechnology is expected to under-perform the Wenzhou Kangning. In addition to that, Vishay Intertechnology is 1.05 times more volatile than Wenzhou Kangning Hospital. It trades about -0.17 of its total potential returns per unit of risk. Wenzhou Kangning Hospital is currently generating about -0.16 per unit of volatility. If you would invest 153.00 in Wenzhou Kangning Hospital on October 30, 2024 and sell it today you would lose (20.00) from holding Wenzhou Kangning Hospital or give up 13.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vishay Intertechnology vs. Wenzhou Kangning Hospital
Performance |
| Timeline |
| Vishay Intertechnology |
| Wenzhou Kangning Hospital |
Vishay Intertechnology and Wenzhou Kangning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Intertechnology and Wenzhou Kangning
The main advantage of trading using opposite Vishay Intertechnology and Wenzhou Kangning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Intertechnology position performs unexpectedly, Wenzhou Kangning 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 Wenzhou Kangning will offset losses from the drop in Wenzhou Kangning's long position.| Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc |
| Wenzhou Kangning vs. Universal Insurance Holdings | Wenzhou Kangning vs. HANOVER INSURANCE | Wenzhou Kangning vs. Japan Asia Investment | Wenzhou Kangning vs. Guangdong Investment Limited |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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