Correlation Between Holtek Semiconductor and Macroblock

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

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

Diversification Opportunities for Holtek Semiconductor and Macroblock

0.89

Correlation Coefficient

Holtek Semiconductor  Macroblock

Very poor diversification

The 3 months correlation between Holtek and Macroblock is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Holtek Semiconductor and Macroblock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macroblock 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 Macroblock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macroblock has no effect on the direction of Holtek Semiconductor i.e., Holtek Semiconductor and Macroblock go up and down completely randomly.

Pair Corralation between Holtek Semiconductor and Macroblock

Assuming the 90 days trading horizon Holtek Semiconductor is expected to generate 1.01 times more return on investment than Macroblock. However, Holtek Semiconductor is 1.01 times more volatile than Macroblock. It trades about -0.02 of its potential returns per unit of risk. Macroblock is currently generating about -0.03 per unit of risk. If you would invest  6,727  in Holtek Semiconductor on October 15, 2024 and sell it today you would lose (1,387) from holding Holtek Semiconductor or give up 20.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.79%
Values	Daily Returns

Holtek Semiconductor  vs.  Macroblock

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 fairly stable basic indicators, Holtek Semiconductor is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Macroblock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Macroblock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Holtek Semiconductor and Macroblock

The main advantage of trading using opposite Holtek Semiconductor and Macroblock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holtek Semiconductor position performs unexpectedly, Macroblock 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 Macroblock will offset losses from the drop in Macroblock's long position.

The idea behind Holtek Semiconductor and Macroblock 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.