Correlation Between Yulon Nissan and MediaTek
Can any of the company-specific risk be diversified away by investing in both Yulon Nissan and MediaTek 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 Yulon Nissan and MediaTek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yulon Nissan Motor and MediaTek, you can compare the effects of market volatilities on Yulon Nissan and MediaTek 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 Yulon Nissan with a short position of MediaTek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Nissan and MediaTek.
Diversification Opportunities for Yulon Nissan and MediaTek
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Yulon and MediaTek is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Nissan Motor and MediaTek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediaTek and Yulon Nissan 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 Yulon Nissan Motor are associated (or correlated) with MediaTek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediaTek has no effect on the direction of Yulon Nissan i.e., Yulon Nissan and MediaTek go up and down completely randomly.
Pair Corralation between Yulon Nissan and MediaTek
Assuming the 90 days trading horizon Yulon Nissan Motor is expected to under-perform the MediaTek. But the stock apears to be less risky and, when comparing its historical volatility, Yulon Nissan Motor is 1.47 times less risky than MediaTek. The stock trades about -0.13 of its potential returns per unit of risk. The MediaTek is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 76,400 in MediaTek on November 1, 2024 and sell it today you would earn a total of 70,100 from holding MediaTek or generate 91.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Nissan Motor vs. MediaTek
Performance |
| Timeline |
| Yulon Nissan Motor |
| MediaTek |
Yulon Nissan and MediaTek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Nissan and MediaTek
The main advantage of trading using opposite Yulon Nissan and MediaTek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Nissan position performs unexpectedly, MediaTek 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 MediaTek will offset losses from the drop in MediaTek's long position.| Yulon Nissan vs. Hotai Motor Co | Yulon Nissan vs. Yulon Motor Co | Yulon Nissan vs. Cheng Shin Rubber | Yulon Nissan vs. Formosa Chemicals Fibre |
| MediaTek vs. Hon Hai Precision | MediaTek vs. United Microelectronics | MediaTek vs. LARGAN Precision Co | MediaTek vs. Delta Electronics |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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