Correlation Between Holtek Semiconductor and Generalplus Technology
Can any of the company-specific risk be diversified away by investing in both Holtek Semiconductor and Generalplus Technology 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 Generalplus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holtek Semiconductor and Generalplus Technology, you can compare the effects of market volatilities on Holtek Semiconductor and Generalplus Technology 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 Generalplus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holtek Semiconductor and Generalplus Technology.
Diversification Opportunities for Holtek Semiconductor and Generalplus Technology
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Holtek and Generalplus is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Holtek Semiconductor and Generalplus Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generalplus Technology 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 Generalplus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generalplus Technology has no effect on the direction of Holtek Semiconductor i.e., Holtek Semiconductor and Generalplus Technology go up and down completely randomly.
Pair Corralation between Holtek Semiconductor and Generalplus Technology
Assuming the 90 days trading horizon Holtek Semiconductor is expected to under-perform the Generalplus Technology. But the stock apears to be less risky and, when comparing its historical volatility, Holtek Semiconductor is 1.16 times less risky than Generalplus Technology. The stock trades about -0.04 of its potential returns per unit of risk. The Generalplus Technology is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 5,690 in Generalplus Technology on September 3, 2024 and sell it today you would lose (680.00) from holding Generalplus Technology or give up 11.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holtek Semiconductor vs. Generalplus Technology
Performance |
| Timeline |
| Holtek Semiconductor |
| Generalplus Technology |
Holtek Semiconductor and Generalplus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holtek Semiconductor and Generalplus Technology
The main advantage of trading using opposite Holtek Semiconductor and Generalplus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holtek Semiconductor position performs unexpectedly, Generalplus Technology 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 Generalplus Technology will offset losses from the drop in Generalplus Technology's long position.| Holtek Semiconductor vs. Taiwan Semiconductor Manufacturing | Holtek Semiconductor vs. Yang Ming Marine | Holtek Semiconductor vs. ASE Industrial Holding | Holtek Semiconductor vs. AU Optronics |
| Generalplus Technology vs. Holtek Semiconductor | Generalplus Technology vs. Nuvoton Technology Corp | Generalplus Technology vs. Sonix Technology Co | Generalplus Technology vs. Global Unichip 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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