Correlation Between American Balanced and Holtek Semiconductor
Can any of the company-specific risk be diversified away by investing in both American Balanced 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 American Balanced and Holtek Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced and Holtek Semiconductor, you can compare the effects of market volatilities on American Balanced 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 American Balanced with a short position of Holtek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Holtek Semiconductor.
Diversification Opportunities for American Balanced and Holtek Semiconductor
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Holtek is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced and Holtek Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holtek Semiconductor and American Balanced 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 American Balanced 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 American Balanced i.e., American Balanced and Holtek Semiconductor go up and down completely randomly.
Pair Corralation between American Balanced and Holtek Semiconductor
Assuming the 90 days horizon American Balanced is expected to generate 0.16 times more return on investment than Holtek Semiconductor. However, American Balanced is 6.2 times less risky than Holtek Semiconductor. It trades about 0.21 of its potential returns per unit of risk. Holtek Semiconductor is currently generating about 0.03 per unit of risk. If you would invest 3,439 in American Balanced on November 3, 2024 and sell it today you would earn a total of 94.00 from holding American Balanced or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
American Balanced vs. Holtek Semiconductor
Performance |
| Timeline |
| American Balanced |
| Holtek Semiconductor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Balanced and Holtek Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Holtek Semiconductor
The main advantage of trading using opposite American Balanced and Holtek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced 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.| American Balanced vs. Income Fund Of | American Balanced vs. Capital Income Builder | American Balanced vs. Capital World Growth | American Balanced vs. Growth Fund Of |
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.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |