Correlation Between Holtek Semiconductor and Yuan High
Can any of the company-specific risk be diversified away by investing in both Holtek Semiconductor and Yuan High 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 Yuan High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holtek Semiconductor and Yuan High Tech Development, you can compare the effects of market volatilities on Holtek Semiconductor and Yuan High 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 Yuan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holtek Semiconductor and Yuan High.
Diversification Opportunities for Holtek Semiconductor and Yuan High
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Holtek and Yuan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Holtek Semiconductor and Yuan High Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuan High Tech 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 Yuan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuan High Tech has no effect on the direction of Holtek Semiconductor i.e., Holtek Semiconductor and Yuan High go up and down completely randomly.
Pair Corralation between Holtek Semiconductor and Yuan High
Assuming the 90 days trading horizon Holtek Semiconductor is expected to under-perform the Yuan High. But the stock apears to be less risky and, when comparing its historical volatility, Holtek Semiconductor is 1.7 times less risky than Yuan High. The stock trades about -0.04 of its potential returns per unit of risk. The Yuan High Tech Development is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 11,044 in Yuan High Tech Development on September 3, 2024 and sell it today you would earn a total of 4,356 from holding Yuan High Tech Development or generate 39.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holtek Semiconductor vs. Yuan High Tech Development
Performance |
| Timeline |
| Holtek Semiconductor |
| Yuan High Tech |
Holtek Semiconductor and Yuan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holtek Semiconductor and Yuan High
The main advantage of trading using opposite Holtek Semiconductor and Yuan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holtek Semiconductor position performs unexpectedly, Yuan High 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 Yuan High will offset losses from the drop in Yuan High'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 |
| Yuan High vs. Taiwan Semiconductor Manufacturing | Yuan High vs. Yang Ming Marine | Yuan High vs. ASE Industrial Holding | Yuan High vs. AU Optronics |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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