Correlation Between Nan Ya and Holtek Semiconductor
Can any of the company-specific risk be diversified away by investing in both Nan Ya and Holtek Semiconductor 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 Nan Ya and Holtek Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nan Ya Plastics and Holtek Semiconductor, you can compare the effects of market volatilities on Nan Ya and Holtek Semiconductor 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 Nan Ya with a short position of Holtek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nan Ya and Holtek Semiconductor.
Diversification Opportunities for Nan Ya and Holtek Semiconductor
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nan and Holtek is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nan Ya Plastics and Holtek Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holtek Semiconductor and Nan Ya 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 Nan Ya Plastics are associated (or correlated) with Holtek Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holtek Semiconductor has no effect on the direction of Nan Ya i.e., Nan Ya and Holtek Semiconductor go up and down completely randomly.
Pair Corralation between Nan Ya and Holtek Semiconductor
Assuming the 90 days trading horizon Nan Ya Plastics is expected to under-perform the Holtek Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Nan Ya Plastics is 1.45 times less risky than Holtek Semiconductor. The stock trades about -0.1 of its potential returns per unit of risk. The Holtek Semiconductor is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,615 in Holtek Semiconductor on September 12, 2024 and sell it today you would earn a total of 335.00 from holding Holtek Semiconductor or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nan Ya Plastics vs. Holtek Semiconductor
Performance |
| Timeline |
| Nan Ya Plastics |
| Holtek Semiconductor |
Nan Ya and Holtek Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nan Ya and Holtek Semiconductor
The main advantage of trading using opposite Nan Ya and Holtek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nan Ya position performs unexpectedly, Holtek Semiconductor 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 Holtek Semiconductor will offset losses from the drop in Holtek Semiconductor's long position.| Nan Ya vs. Tainan Spinning Co | Nan Ya vs. Lealea Enterprise Co | Nan Ya vs. China Petrochemical Development | Nan Ya vs. Ruentex Development Co |
| Holtek Semiconductor vs. AU Optronics | Holtek Semiconductor vs. Innolux Corp | Holtek Semiconductor vs. Ruentex Development Co | Holtek Semiconductor vs. WiseChip Semiconductor |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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