Correlation Between Vishay Intertechnology and ASM International
Can any of the company-specific risk be diversified away by investing in both Vishay Intertechnology and ASM International 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 ASM International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vishay Intertechnology and ASM International NV, you can compare the effects of market volatilities on Vishay Intertechnology and ASM International 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 ASM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Intertechnology and ASM International.
Diversification Opportunities for Vishay Intertechnology and ASM International
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vishay and ASM is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International 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 ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and ASM International go up and down completely randomly.
Pair Corralation between Vishay Intertechnology and ASM International
Assuming the 90 days trading horizon Vishay Intertechnology is expected to generate 1.83 times more return on investment than ASM International. However, Vishay Intertechnology is 1.83 times more volatile than ASM International NV. It trades about 0.16 of its potential returns per unit of risk. ASM International NV is currently generating about -0.18 per unit of risk. If you would invest 1,618 in Vishay Intertechnology on August 31, 2024 and sell it today you would earn a total of 205.00 from holding Vishay Intertechnology or generate 12.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vishay Intertechnology vs. ASM International NV
Performance |
| Timeline |
| Vishay Intertechnology |
| ASM International |
Vishay Intertechnology and ASM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Intertechnology and ASM International
The main advantage of trading using opposite Vishay Intertechnology and ASM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Intertechnology position performs unexpectedly, ASM International 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 ASM International will offset losses from the drop in ASM International's long position.| Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc |
| ASM International vs. Heartland Financial USA | ASM International vs. Commonwealth Bank of | ASM International vs. Vishay Intertechnology | ASM International vs. AECOM TECHNOLOGY |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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