Correlation Between Generalplus Technology and Holtek Semiconductor

Can any of the company-specific risk be diversified away by investing in both Generalplus Technology 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 Generalplus Technology and Holtek Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Generalplus Technology and Holtek Semiconductor, you can compare the effects of market volatilities on Generalplus Technology 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 Generalplus Technology with a short position of Holtek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generalplus Technology and Holtek Semiconductor.

Diversification Opportunities for Generalplus Technology and Holtek Semiconductor

0.1

Correlation Coefficient

Generalplus Technology  Holtek Semiconductor

Average diversification

The 3 months correlation between Generalplus and Holtek is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Generalplus Technology and Holtek Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holtek Semiconductor and Generalplus Technology 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 Generalplus Technology 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 Generalplus Technology i.e., Generalplus Technology and Holtek Semiconductor go up and down completely randomly.

Pair Corralation between Generalplus Technology and Holtek Semiconductor

Assuming the 90 days trading horizon Generalplus Technology is expected to generate 0.86 times more return on investment than Holtek Semiconductor. However, Generalplus Technology is 1.16 times less risky than Holtek Semiconductor. It trades about -0.02 of its potential returns per unit of risk. Holtek Semiconductor is currently generating about -0.09 per unit of risk. If you would invest  5,440  in Generalplus Technology on October 21, 2024 and sell it today you would lose (250.00) from holding Generalplus Technology or give up 4.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Generalplus Technology  vs.  Holtek Semiconductor

Generalplus Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Generalplus Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Generalplus Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Holtek Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Holtek Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Generalplus Technology and Holtek Semiconductor

The main advantage of trading using opposite Generalplus Technology and Holtek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generalplus Technology 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.

The idea behind Generalplus Technology and Holtek Semiconductor 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.

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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.