Correlation Between I Jang and Holtek Semiconductor

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

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

Diversification Opportunities for I Jang and Holtek Semiconductor

-0.08

Correlation Coefficient

I Jang  Holtek Semiconductor

Good diversification

The 3 months correlation between 8342 and Holtek is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding I Jang Industrial and Holtek Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holtek Semiconductor and I Jang 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 I Jang Industrial 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 I Jang i.e., I Jang and Holtek Semiconductor go up and down completely randomly.

Pair Corralation between I Jang and Holtek Semiconductor

Assuming the 90 days trading horizon I Jang Industrial is expected to generate 0.43 times more return on investment than Holtek Semiconductor. However, I Jang Industrial is 2.3 times less risky than Holtek Semiconductor. It trades about 0.1 of its potential returns per unit of risk. Holtek Semiconductor is currently generating about -0.11 per unit of risk. If you would invest  8,700  in I Jang Industrial on October 5, 2024 and sell it today you would earn a total of  170.00  from holding I Jang Industrial or generate 1.95% return on investment over 90 days.

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

I Jang Industrial  vs.  Holtek Semiconductor

I Jang Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days I Jang Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, I Jang 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 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 I Jang and Holtek Semiconductor

The main advantage of trading using opposite I Jang and Holtek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Jang 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 I Jang Industrial 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.