Correlation Between Holtek Semiconductor and Chun Yuan
Can any of the company-specific risk be diversified away by investing in both Holtek Semiconductor and Chun Yuan 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 Holtek Semiconductor and Chun Yuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holtek Semiconductor and Chun Yuan Steel, you can compare the effects of market volatilities on Holtek Semiconductor and Chun Yuan 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 Holtek Semiconductor with a short position of Chun Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holtek Semiconductor and Chun Yuan.
Diversification Opportunities for Holtek Semiconductor and Chun Yuan
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Holtek and Chun is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Holtek Semiconductor and Chun Yuan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chun Yuan Steel and Holtek Semiconductor 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 Holtek Semiconductor are associated (or correlated) with Chun Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chun Yuan Steel has no effect on the direction of Holtek Semiconductor i.e., Holtek Semiconductor and Chun Yuan go up and down completely randomly.
Pair Corralation between Holtek Semiconductor and Chun Yuan
Assuming the 90 days trading horizon Holtek Semiconductor is expected to under-perform the Chun Yuan. In addition to that, Holtek Semiconductor is 1.22 times more volatile than Chun Yuan Steel. It trades about -0.02 of its total potential returns per unit of risk. Chun Yuan Steel is currently generating about 0.03 per unit of volatility. If you would invest 1,620 in Chun Yuan Steel on September 14, 2024 and sell it today you would earn a total of 265.00 from holding Chun Yuan Steel or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Holtek Semiconductor vs. Chun Yuan Steel
Performance |
| Timeline |
| Holtek Semiconductor |
| Chun Yuan Steel |
Holtek Semiconductor and Chun Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holtek Semiconductor and Chun Yuan
The main advantage of trading using opposite Holtek Semiconductor and Chun Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holtek Semiconductor position performs unexpectedly, Chun Yuan 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 Chun Yuan will offset losses from the drop in Chun Yuan's long position.| Holtek Semiconductor vs. Novatek Microelectronics Corp | Holtek Semiconductor vs. Realtek Semiconductor Corp | Holtek Semiconductor vs. Nuvoton Technology Corp | Holtek Semiconductor vs. Global Unichip Corp |
| Chun Yuan vs. Tainan Spinning Co | Chun Yuan vs. Lealea Enterprise Co | Chun Yuan vs. China Petrochemical Development | Chun Yuan vs. Ruentex Development Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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