Correlation Between Scientech Corp and Holtek Semiconductor
Can any of the company-specific risk be diversified away by investing in both Scientech Corp 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 Scientech Corp and Holtek Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientech Corp and Holtek Semiconductor, you can compare the effects of market volatilities on Scientech Corp 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 Scientech Corp with a short position of Holtek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientech Corp and Holtek Semiconductor.
Diversification Opportunities for Scientech Corp and Holtek Semiconductor
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scientech and Holtek is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Scientech Corp and Holtek Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holtek Semiconductor and Scientech Corp 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 Scientech Corp 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 Scientech Corp i.e., Scientech Corp and Holtek Semiconductor go up and down completely randomly.
Pair Corralation between Scientech Corp and Holtek Semiconductor
Assuming the 90 days trading horizon Scientech Corp is expected to generate 1.96 times more return on investment than Holtek Semiconductor. However, Scientech Corp is 1.96 times more volatile than Holtek Semiconductor. It trades about 0.12 of its potential returns per unit of risk. Holtek Semiconductor is currently generating about -0.02 per unit of risk. If you would invest 7,690 in Scientech Corp on September 4, 2024 and sell it today you would earn a total of 36,210 from holding Scientech Corp or generate 470.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Scientech Corp vs. Holtek Semiconductor
Performance |
| Timeline |
| Scientech Corp |
| Holtek Semiconductor |
Scientech Corp and Holtek Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientech Corp and Holtek Semiconductor
The main advantage of trading using opposite Scientech Corp and Holtek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientech Corp 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.| Scientech Corp vs. Taiwan Semiconductor Manufacturing | Scientech Corp vs. Yang Ming Marine | Scientech Corp vs. AU Optronics | Scientech Corp vs. Innolux Corp |
| Holtek Semiconductor vs. Taiwan Semiconductor Manufacturing | Holtek Semiconductor vs. Yang Ming Marine | Holtek Semiconductor vs. AU Optronics | Holtek Semiconductor vs. Innolux Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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