Correlation Between Vishay Intertechnology and Yanzhou Coal

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Can any of the company-specific risk be diversified away by investing in both Vishay Intertechnology and Yanzhou Coal 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 Yanzhou Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vishay Intertechnology and Yanzhou Coal Mining, you can compare the effects of market volatilities on Vishay Intertechnology and Yanzhou Coal 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 Yanzhou Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vishay Intertechnology and Yanzhou Coal.

Diversification Opportunities for Vishay Intertechnology and Yanzhou Coal

VishayYanzhouDiversified AwayVishayYanzhouDiversified Away100%
-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Vishay and Yanzhou is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology and Yanzhou Coal Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yanzhou Coal Mining 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 Yanzhou Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yanzhou Coal Mining has no effect on the direction of Vishay Intertechnology i.e., Vishay Intertechnology and Yanzhou Coal go up and down completely randomly.

Pair Corralation between Vishay Intertechnology and Yanzhou Coal

Assuming the 90 days trading horizon Vishay Intertechnology is expected to generate 1.24 times more return on investment than Yanzhou Coal. However, Vishay Intertechnology is 1.24 times more volatile than Yanzhou Coal Mining. It trades about 0.12 of its potential returns per unit of risk. Yanzhou Coal Mining is currently generating about -0.12 per unit of risk. If you would invest  1,418  in Vishay Intertechnology on November 19, 2024 and sell it today you would earn a total of  264.00  from holding Vishay Intertechnology or generate 18.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Vishay Intertechnology  vs.  Yanzhou Coal Mining

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-50510
JavaScript chart by amCharts 3.21.15VHY YZC
       Timeline  
Vishay Intertechnology 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Vishay Intertechnology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Vishay Intertechnology unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb14.51515.51616.51717.518
Yanzhou Coal Mining 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Yanzhou Coal Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb9.51010.51111.5

Vishay Intertechnology and Yanzhou Coal Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.5-6.37-4.23-2.10.02.134.296.458.61 0.020.040.060.08
JavaScript chart by amCharts 3.21.15VHY YZC
       Returns  

Pair Trading with Vishay Intertechnology and Yanzhou Coal

The main advantage of trading using opposite Vishay Intertechnology and Yanzhou Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Intertechnology position performs unexpectedly, Yanzhou Coal 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 Yanzhou Coal will offset losses from the drop in Yanzhou Coal's long position.
The idea behind Vishay Intertechnology and Yanzhou Coal Mining 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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