Correlation Between Holtek Semiconductor and Newretail
Can any of the company-specific risk be diversified away by investing in both Holtek Semiconductor and Newretail 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 Newretail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holtek Semiconductor and Newretail Co, you can compare the effects of market volatilities on Holtek Semiconductor and Newretail 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 Newretail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holtek Semiconductor and Newretail.
Diversification Opportunities for Holtek Semiconductor and Newretail
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Holtek and Newretail is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Holtek Semiconductor and Newretail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newretail 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 Newretail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newretail has no effect on the direction of Holtek Semiconductor i.e., Holtek Semiconductor and Newretail go up and down completely randomly.
Pair Corralation between Holtek Semiconductor and Newretail
Assuming the 90 days trading horizon Holtek Semiconductor is expected to under-perform the Newretail. But the stock apears to be less risky and, when comparing its historical volatility, Holtek Semiconductor is 2.25 times less risky than Newretail. The stock trades about -0.18 of its potential returns per unit of risk. The Newretail Co is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2,010 in Newretail Co on August 30, 2024 and sell it today you would earn a total of 585.00 from holding Newretail Co or generate 29.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Holtek Semiconductor vs. Newretail Co
Performance |
| Timeline |
| Holtek Semiconductor |
| Newretail |
Holtek Semiconductor and Newretail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holtek Semiconductor and Newretail
The main advantage of trading using opposite Holtek Semiconductor and Newretail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holtek Semiconductor position performs unexpectedly, Newretail 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 Newretail will offset losses from the drop in Newretail'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 |
| Newretail vs. Simple Mart Retail | Newretail vs. Johnson Health Tech | Newretail vs. Pacific Construction Co | Newretail vs. Kindom Construction 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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