Correlation Between Holtek Semiconductor and Xander International
Can any of the company-specific risk be diversified away by investing in both Holtek Semiconductor and Xander International 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 Xander International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holtek Semiconductor and Xander International, you can compare the effects of market volatilities on Holtek Semiconductor and Xander International 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 Xander International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holtek Semiconductor and Xander International.
Diversification Opportunities for Holtek Semiconductor and Xander International
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Holtek and Xander is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Holtek Semiconductor and Xander International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xander International 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 Xander International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xander International has no effect on the direction of Holtek Semiconductor i.e., Holtek Semiconductor and Xander International go up and down completely randomly.
Pair Corralation between Holtek Semiconductor and Xander International
Assuming the 90 days trading horizon Holtek Semiconductor is expected to under-perform the Xander International. But the stock apears to be less risky and, when comparing its historical volatility, Holtek Semiconductor is 1.09 times less risky than Xander International. The stock trades about -0.09 of its potential returns per unit of risk. The Xander International is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,370 in Xander International on October 26, 2024 and sell it today you would lose (50.00) from holding Xander International or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holtek Semiconductor vs. Xander International
Performance |
| Timeline |
| Holtek Semiconductor |
| Xander International |
Holtek Semiconductor and Xander International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holtek Semiconductor and Xander International
The main advantage of trading using opposite Holtek Semiconductor and Xander International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holtek Semiconductor position performs unexpectedly, Xander International 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 Xander International will offset losses from the drop in Xander International's long position.The idea behind Holtek Semiconductor and Xander International 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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