Correlation Between Vishay Intertechnology and International Business
Can any of the company-specific risk be diversified away by investing in both Vishay Intertechnology and International Business 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 International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vishay Intertechnology and International Business Machines, you can compare the effects of market volatilities on Vishay Intertechnology and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Intertechnology and International Business.
Diversification Opportunities for Vishay Intertechnology and International Business
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vishay and International is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and International Business go up and down completely randomly.
Pair Corralation between Vishay Intertechnology and International Business
Assuming the 90 days trading horizon Vishay Intertechnology is expected to under-perform the International Business. In addition to that, Vishay Intertechnology is 1.69 times more volatile than International Business Machines. It trades about -0.06 of its total potential returns per unit of risk. International Business Machines is currently generating about 0.16 per unit of volatility. If you would invest 15,477 in International Business Machines on October 13, 2024 and sell it today you would earn a total of 5,918 from holding International Business Machines or generate 38.24% 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. International Business Machine
Performance |
| Timeline |
| Vishay Intertechnology |
| International Business |
Vishay Intertechnology and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Intertechnology and International Business
The main advantage of trading using opposite Vishay Intertechnology and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Intertechnology position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| Vishay Intertechnology vs. PennantPark Investment | Vishay Intertechnology vs. Ultra Clean Holdings | Vishay Intertechnology vs. ECHO INVESTMENT ZY | Vishay Intertechnology vs. Japan Asia Investment |
| International Business vs. Align Technology | International Business vs. Vishay Intertechnology | International Business vs. X FAB Silicon Foundries | International Business vs. Cleanaway Waste Management |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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