Correlation Between Vishay Intertechnology and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both Vishay Intertechnology and ArcelorMittal 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 ArcelorMittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vishay Intertechnology and ArcelorMittal SA, you can compare the effects of market volatilities on Vishay Intertechnology and ArcelorMittal 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 ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Intertechnology and ArcelorMittal.
Diversification Opportunities for Vishay Intertechnology and ArcelorMittal
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vishay and ArcelorMittal is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and ArcelorMittal SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA 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 ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and ArcelorMittal go up and down completely randomly.
Pair Corralation between Vishay Intertechnology and ArcelorMittal
Assuming the 90 days trading horizon Vishay Intertechnology is expected to under-perform the ArcelorMittal. In addition to that, Vishay Intertechnology is 1.27 times more volatile than ArcelorMittal SA. It trades about -0.12 of its total potential returns per unit of risk. ArcelorMittal SA is currently generating about 0.0 per unit of volatility. If you would invest 2,279 in ArcelorMittal SA on August 29, 2024 and sell it today you would lose (10.00) from holding ArcelorMittal SA or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vishay Intertechnology vs. ArcelorMittal SA
Performance |
| Timeline |
| Vishay Intertechnology |
| ArcelorMittal SA |
Vishay Intertechnology and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Intertechnology and ArcelorMittal
The main advantage of trading using opposite Vishay Intertechnology and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Intertechnology position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal's long position.| Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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