Correlation Between Holtek Semiconductor and Global Mixed
Can any of the company-specific risk be diversified away by investing in both Holtek Semiconductor and Global Mixed 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 Global Mixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holtek Semiconductor and Global Mixed Mode Technology, you can compare the effects of market volatilities on Holtek Semiconductor and Global Mixed 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 Global Mixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holtek Semiconductor and Global Mixed.
Diversification Opportunities for Holtek Semiconductor and Global Mixed
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Holtek and Global is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Holtek Semiconductor and Global Mixed Mode Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Mixed Mode 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 Global Mixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Mixed Mode has no effect on the direction of Holtek Semiconductor i.e., Holtek Semiconductor and Global Mixed go up and down completely randomly.
Pair Corralation between Holtek Semiconductor and Global Mixed
Assuming the 90 days trading horizon Holtek Semiconductor is expected to under-perform the Global Mixed. In addition to that, Holtek Semiconductor is 1.5 times more volatile than Global Mixed Mode Technology. It trades about -0.03 of its total potential returns per unit of risk. Global Mixed Mode Technology is currently generating about -0.03 per unit of volatility. If you would invest 25,200 in Global Mixed Mode Technology on October 25, 2024 and sell it today you would lose (2,450) from holding Global Mixed Mode Technology or give up 9.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Holtek Semiconductor vs. Global Mixed Mode Technology
Performance |
| Timeline |
| Holtek Semiconductor |
| Global Mixed Mode |
Holtek Semiconductor and Global Mixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holtek Semiconductor and Global Mixed
The main advantage of trading using opposite Holtek Semiconductor and Global Mixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holtek Semiconductor position performs unexpectedly, Global Mixed 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 Global Mixed will offset losses from the drop in Global Mixed's long position.The idea behind Holtek Semiconductor and Global Mixed Mode Technology 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.
| Global Mixed vs. Sitronix Technology Corp | Global Mixed vs. Novatek Microelectronics Corp | Global Mixed vs. Global Unichip Corp | Global Mixed vs. Holtek Semiconductor |
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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