Correlation Between Vishay Intertechnology and Kingdee International

Can any of the company-specific risk be diversified away by investing in both Vishay Intertechnology and Kingdee 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 Kingdee 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 Kingdee International Software, you can compare the effects of market volatilities on Vishay Intertechnology and Kingdee 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 Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Intertechnology and Kingdee International.

Diversification Opportunities for Vishay Intertechnology and Kingdee International

0.19

Correlation Coefficient

Vishay Intertechnology  Kingdee International

Average diversification

The 3 months correlation between Vishay and Kingdee is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee 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 Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and Kingdee International go up and down completely randomly.

Pair Corralation between Vishay Intertechnology and Kingdee International

Assuming the 90 days trading horizon Vishay Intertechnology is expected to generate 0.77 times more return on investment than Kingdee International. However, Vishay Intertechnology is 1.3 times less risky than Kingdee International. It trades about 0.03 of its potential returns per unit of risk. Kingdee International Software is currently generating about -0.03 per unit of risk. If you would invest  1,604  in Vishay Intertechnology on October 8, 2024 and sell it today you would earn a total of  52.00  from holding Vishay Intertechnology or generate 3.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Vishay Intertechnology  vs.  Kingdee International Software

Vishay Intertechnology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vishay Intertechnology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Vishay Intertechnology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Kingdee International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kingdee International Software has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Kingdee International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Vishay Intertechnology and Kingdee International

The main advantage of trading using opposite Vishay Intertechnology and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Intertechnology position performs unexpectedly, Kingdee 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 Kingdee International will offset losses from the drop in Kingdee International's long position.

The idea behind Vishay Intertechnology and Kingdee International Software pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.