Correlation Between MediaTek and Sampo Corp
Can any of the company-specific risk be diversified away by investing in both MediaTek and Sampo Corp 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 MediaTek and Sampo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Sampo Corp, you can compare the effects of market volatilities on MediaTek and Sampo Corp 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 MediaTek with a short position of Sampo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Sampo Corp.
Diversification Opportunities for MediaTek and Sampo Corp
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MediaTek and Sampo is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Sampo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sampo Corp and MediaTek 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 MediaTek are associated (or correlated) with Sampo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sampo Corp has no effect on the direction of MediaTek i.e., MediaTek and Sampo Corp go up and down completely randomly.
Pair Corralation between MediaTek and Sampo Corp
Assuming the 90 days trading horizon MediaTek is expected to under-perform the Sampo Corp. In addition to that, MediaTek is 3.09 times more volatile than Sampo Corp. It trades about -0.15 of its total potential returns per unit of risk. Sampo Corp is currently generating about 0.02 per unit of volatility. If you would invest 2,840 in Sampo Corp on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Sampo Corp or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaTek vs. Sampo Corp
Performance |
| Timeline |
| MediaTek |
| Sampo Corp |
MediaTek and Sampo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Sampo Corp
The main advantage of trading using opposite MediaTek and Sampo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Sampo Corp 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 Sampo Corp will offset losses from the drop in Sampo Corp's long position.| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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