Correlation Between Vanguard International and Holtek Semiconductor

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

Diversification Opportunities for Vanguard International and Holtek Semiconductor

-0.41
  Correlation Coefficient

Very good diversification

The 3 months correlation between Vanguard and Holtek is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard International Semicon and Holtek Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holtek Semiconductor and Vanguard International 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 Vanguard International Semiconductor 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 Vanguard International i.e., Vanguard International and Holtek Semiconductor go up and down completely randomly.

Pair Corralation between Vanguard International and Holtek Semiconductor

Assuming the 90 days trading horizon Vanguard International Semiconductor is expected to generate 1.25 times more return on investment than Holtek Semiconductor. However, Vanguard International is 1.25 times more volatile than Holtek Semiconductor. It trades about 0.03 of its potential returns per unit of risk. Holtek Semiconductor is currently generating about -0.04 per unit of risk. If you would invest  7,744  in Vanguard International Semiconductor on September 12, 2024 and sell it today you would earn a total of  1,526  from holding Vanguard International Semiconductor or generate 19.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy99.71%
ValuesDaily Returns

Vanguard International Semicon  vs.  Holtek Semiconductor

 Performance 
       Timeline  
Vanguard International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Vanguard International Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.
Holtek Semiconductor 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Holtek Semiconductor are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Holtek Semiconductor may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vanguard International and Holtek Semiconductor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vanguard International and Holtek Semiconductor

The main advantage of trading using opposite Vanguard International and Holtek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard International 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.
The idea behind Vanguard International Semiconductor and Holtek Semiconductor 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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