Correlation Between Holtek Semiconductor and Ko Ja
Can any of the company-specific risk be diversified away by investing in both Holtek Semiconductor and Ko Ja 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 Ko Ja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holtek Semiconductor and Ko Ja Cayman, you can compare the effects of market volatilities on Holtek Semiconductor and Ko Ja 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 Ko Ja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holtek Semiconductor and Ko Ja.
Diversification Opportunities for Holtek Semiconductor and Ko Ja
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Holtek and 5215 is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Holtek Semiconductor and Ko Ja Cayman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ko Ja Cayman 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 Ko Ja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ko Ja Cayman has no effect on the direction of Holtek Semiconductor i.e., Holtek Semiconductor and Ko Ja go up and down completely randomly.
Pair Corralation between Holtek Semiconductor and Ko Ja
Assuming the 90 days trading horizon Holtek Semiconductor is expected to under-perform the Ko Ja. In addition to that, Holtek Semiconductor is 1.79 times more volatile than Ko Ja Cayman. It trades about -0.19 of its total potential returns per unit of risk. Ko Ja Cayman is currently generating about -0.1 per unit of volatility. If you would invest 4,895 in Ko Ja Cayman on September 1, 2024 and sell it today you would lose (135.00) from holding Ko Ja Cayman or give up 2.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Holtek Semiconductor vs. Ko Ja Cayman
Performance |
| Timeline |
| Holtek Semiconductor |
| Ko Ja Cayman |
Holtek Semiconductor and Ko Ja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holtek Semiconductor and Ko Ja
The main advantage of trading using opposite Holtek Semiconductor and Ko Ja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holtek Semiconductor position performs unexpectedly, Ko Ja 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 Ko Ja will offset losses from the drop in Ko Ja's long position.The idea behind Holtek Semiconductor and Ko Ja Cayman 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.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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