Correlation Between Vishay Intertechnology and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Vishay Intertechnology and Quaker Chemical 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 Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vishay Intertechnology and Quaker Chemical, you can compare the effects of market volatilities on Vishay Intertechnology and Quaker Chemical 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 Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Intertechnology and Quaker Chemical.
Diversification Opportunities for Vishay Intertechnology and Quaker Chemical
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vishay and Quaker is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical 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 Quaker Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaker Chemical has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and Quaker Chemical go up and down completely randomly.
Pair Corralation between Vishay Intertechnology and Quaker Chemical
Assuming the 90 days trading horizon Vishay Intertechnology is expected to under-perform the Quaker Chemical. In addition to that, Vishay Intertechnology is 1.16 times more volatile than Quaker Chemical. It trades about -0.03 of its total potential returns per unit of risk. Quaker Chemical is currently generating about -0.02 per unit of volatility. If you would invest 14,497 in Quaker Chemical on November 7, 2024 and sell it today you would lose (1,097) from holding Quaker Chemical or give up 7.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vishay Intertechnology vs. Quaker Chemical
Performance |
| Timeline |
| Vishay Intertechnology |
| Quaker Chemical |
Vishay Intertechnology and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vishay Intertechnology and Quaker Chemical
The main advantage of trading using opposite Vishay Intertechnology and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Intertechnology position performs unexpectedly, Quaker Chemical 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 Quaker Chemical will offset losses from the drop in Quaker Chemical's long position.| Vishay Intertechnology vs. Corsair Gaming | Vishay Intertechnology vs. DELTA AIR LINES | Vishay Intertechnology vs. Media and Games | Vishay Intertechnology vs. GameStop Corp |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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