Correlation Between Holtek Semiconductor and Stark Technology

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

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

Diversification Opportunities for Holtek Semiconductor and Stark Technology

0.28

Correlation Coefficient

Holtek Semiconductor  Stark Technology

Modest diversification

The 3 months correlation between Holtek and Stark is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Holtek Semiconductor and Stark Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stark Technology 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 Stark Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stark Technology has no effect on the direction of Holtek Semiconductor i.e., Holtek Semiconductor and Stark Technology go up and down completely randomly.

Pair Corralation between Holtek Semiconductor and Stark Technology

Assuming the 90 days trading horizon Holtek Semiconductor is expected to generate 3.83 times less return on investment than Stark Technology. In addition to that, Holtek Semiconductor is 1.64 times more volatile than Stark Technology. It trades about 0.02 of its total potential returns per unit of risk. Stark Technology is currently generating about 0.11 per unit of volatility. If you would invest  12,100  in Stark Technology on September 15, 2024 and sell it today you would earn a total of  1,250  from holding Stark Technology or generate 10.33% return on investment over 90 days.

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

Holtek Semiconductor  vs.  Stark Technology

Holtek Semiconductor

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Holtek Semiconductor are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Stark Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stark Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Stark Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Holtek Semiconductor and Stark Technology

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

The idea behind Holtek Semiconductor and Stark Technology 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.