Correlation Between Petroleo Brasileiro and Holtek Semiconductor

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

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

Diversification Opportunities for Petroleo Brasileiro and Holtek Semiconductor

-0.43

Correlation Coefficient

Petroleo Brasileiro  Holtek Semiconductor

Very good diversification

The 3 months correlation between Petroleo and Holtek is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Holtek Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holtek Semiconductor and Petroleo Brasileiro 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 Petroleo Brasileiro Petrobras 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 Petroleo Brasileiro i.e., Petroleo Brasileiro and Holtek Semiconductor go up and down completely randomly.

Pair Corralation between Petroleo Brasileiro and Holtek Semiconductor

Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Holtek Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Petroleo Brasileiro Petrobras is 1.66 times less risky than Holtek Semiconductor. The stock trades about 0.0 of its potential returns per unit of risk. The Holtek Semiconductor is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4,615  in Holtek Semiconductor on September 12, 2024 and sell it today you would earn a total of  395.00  from holding Holtek Semiconductor or generate 8.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Petroleo Brasileiro Petrobras  vs.  Holtek Semiconductor

Petroleo Brasileiro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Petroleo Brasileiro Petrobras has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Petroleo Brasileiro is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Holtek Semiconductor

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Holtek Semiconductor are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Holtek Semiconductor may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Petroleo Brasileiro and Holtek Semiconductor

The main advantage of trading using opposite Petroleo Brasileiro and Holtek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro 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 Petroleo Brasileiro Petrobras 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..