Correlation Between Holtek Semiconductor and Data International

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

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

Diversification Opportunities for Holtek Semiconductor and Data International

0.8

Correlation Coefficient

Holtek Semiconductor  Data International

Very poor diversification

The 3 months correlation between Holtek and Data is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Holtek Semiconductor and Data International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data International 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 Data International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data International has no effect on the direction of Holtek Semiconductor i.e., Holtek Semiconductor and Data International go up and down completely randomly.

Pair Corralation between Holtek Semiconductor and Data International

Assuming the 90 days trading horizon Holtek Semiconductor is expected to generate 0.69 times more return on investment than Data International. However, Holtek Semiconductor is 1.44 times less risky than Data International. It trades about -0.1 of its potential returns per unit of risk. Data International Co is currently generating about -0.26 per unit of risk. If you would invest  5,790  in Holtek Semiconductor on October 25, 2024 and sell it today you would lose (960.00) from holding Holtek Semiconductor or give up 16.58% of portfolio value over 90 days.

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

Holtek Semiconductor  vs.  Data International Co

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.

Data International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Data International Co 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 Holtek Semiconductor and Data International

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

The idea behind Holtek Semiconductor and Data International Co 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.