Correlation Between Vishay Intertechnology and BASF SE
Can any of the company-specific risk be diversified away by investing in both Vishay Intertechnology and BASF SE 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 BASF SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vishay Intertechnology and BASF SE, you can compare the effects of market volatilities on Vishay Intertechnology and BASF SE 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 BASF SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Intertechnology and BASF SE.
Diversification Opportunities for Vishay Intertechnology and BASF SE
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vishay and BASF is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and BASF SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASF SE 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 BASF SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASF SE has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and BASF SE go up and down completely randomly.
Pair Corralation between Vishay Intertechnology and BASF SE
Assuming the 90 days trading horizon Vishay Intertechnology is expected to under-perform the BASF SE. But the stock apears to be less risky and, when comparing its historical volatility, Vishay Intertechnology is 1.18 times less risky than BASF SE. The stock trades about 0.0 of its potential returns per unit of risk. The BASF SE is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,096 in BASF SE on November 9, 2024 and sell it today you would earn a total of 14.00 from holding BASF SE or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vishay Intertechnology vs. BASF SE
Performance |
| Timeline |
| Vishay Intertechnology |
| BASF SE |
Vishay Intertechnology and BASF SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Intertechnology and BASF SE
The main advantage of trading using opposite Vishay Intertechnology and BASF SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Intertechnology position performs unexpectedly, BASF SE 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 BASF SE will offset losses from the drop in BASF SE's long position.| Vishay Intertechnology vs. BOSTON BEER A | Vishay Intertechnology vs. PANIN INSURANCE | Vishay Intertechnology vs. Zurich Insurance Group | Vishay Intertechnology vs. Japan Post Insurance |
| BASF SE vs. FARO Technologies | BASF SE vs. Ribbon Communications | BASF SE vs. Infrastrutture Wireless Italiane | BASF SE vs. Mobilezone Holding AG |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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