Correlation Between Vishay Intertechnology and Insurance Australia
Can any of the company-specific risk be diversified away by investing in both Vishay Intertechnology and Insurance Australia 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 Insurance Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vishay Intertechnology and Insurance Australia Group, you can compare the effects of market volatilities on Vishay Intertechnology and Insurance Australia 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 Insurance Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Intertechnology and Insurance Australia.
Diversification Opportunities for Vishay Intertechnology and Insurance Australia
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vishay and Insurance is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and Insurance Australia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insurance Australia 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 Insurance Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insurance Australia has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and Insurance Australia go up and down completely randomly.
Pair Corralation between Vishay Intertechnology and Insurance Australia
Assuming the 90 days trading horizon Vishay Intertechnology is expected to under-perform the Insurance Australia. In addition to that, Vishay Intertechnology is 1.64 times more volatile than Insurance Australia Group. It trades about -0.09 of its total potential returns per unit of risk. Insurance Australia Group is currently generating about 0.04 per unit of volatility. If you would invest 515.00 in Insurance Australia Group on November 3, 2024 and sell it today you would earn a total of 10.00 from holding Insurance Australia Group or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
Vishay Intertechnology vs. Insurance Australia Group
Performance |
| Timeline |
| Vishay Intertechnology |
| Insurance Australia |
Vishay Intertechnology and Insurance Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Intertechnology and Insurance Australia
The main advantage of trading using opposite Vishay Intertechnology and Insurance Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Intertechnology position performs unexpectedly, Insurance Australia 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 Insurance Australia will offset losses from the drop in Insurance Australia's long position.| Vishay Intertechnology vs. Fuji Media Holdings | Vishay Intertechnology vs. PLAYMATES TOYS | Vishay Intertechnology vs. OURGAME INTHOLDL 00005 | Vishay Intertechnology vs. QINGCI GAMES INC |
| Insurance Australia vs. WIMFARM SA EO | Insurance Australia vs. Tradeweb Markets | Insurance Australia vs. CANON MARKETING JP | Insurance Australia vs. AGRICULTBK HADR25 YC |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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