Correlation Between C Media and Holtek Semiconductor
Can any of the company-specific risk be diversified away by investing in both C Media and Holtek Semiconductor 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 C Media and Holtek Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C Media Electronics and Holtek Semiconductor, you can compare the effects of market volatilities on C Media and Holtek Semiconductor 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 C Media with a short position of Holtek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Media and Holtek Semiconductor.
Diversification Opportunities for C Media and Holtek Semiconductor
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 6237 and Holtek is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding C Media Electronics and Holtek Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holtek Semiconductor and C Media 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 C Media Electronics are associated (or correlated) with Holtek Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holtek Semiconductor has no effect on the direction of C Media i.e., C Media and Holtek Semiconductor go up and down completely randomly.
Pair Corralation between C Media and Holtek Semiconductor
Assuming the 90 days trading horizon C Media Electronics is expected to generate 0.78 times more return on investment than Holtek Semiconductor. However, C Media Electronics is 1.28 times less risky than Holtek Semiconductor. It trades about -0.07 of its potential returns per unit of risk. Holtek Semiconductor is currently generating about -0.18 per unit of risk. If you would invest 4,980 in C Media Electronics on August 30, 2024 and sell it today you would lose (140.00) from holding C Media Electronics or give up 2.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
C Media Electronics vs. Holtek Semiconductor
Performance |
| Timeline |
| C Media Electronics |
| Holtek Semiconductor |
C Media and Holtek Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Media and Holtek Semiconductor
The main advantage of trading using opposite C Media and Holtek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Media position performs unexpectedly, Holtek Semiconductor 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 Holtek Semiconductor will offset losses from the drop in Holtek Semiconductor's long position.| C Media vs. Taiwan Semiconductor Manufacturing | C Media vs. MediaTek | C Media vs. United Microelectronics | C Media vs. Novatek Microelectronics Corp |
| Holtek Semiconductor vs. Novatek Microelectronics Corp | Holtek Semiconductor vs. Realtek Semiconductor Corp | Holtek Semiconductor vs. Nuvoton Technology Corp | Holtek Semiconductor 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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