Correlation Between MediaTek and Amtran Technology
Can any of the company-specific risk be diversified away by investing in both MediaTek and Amtran 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 MediaTek and Amtran Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Amtran Technology Co, you can compare the effects of market volatilities on MediaTek and Amtran 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 MediaTek with a short position of Amtran Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Amtran Technology.
Diversification Opportunities for MediaTek and Amtran Technology
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between MediaTek and Amtran is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Amtran Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtran Technology 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 Amtran Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtran Technology has no effect on the direction of MediaTek i.e., MediaTek and Amtran Technology go up and down completely randomly.
Pair Corralation between MediaTek and Amtran Technology
Assuming the 90 days trading horizon MediaTek is expected to generate 1.28 times less return on investment than Amtran Technology. But when comparing it to its historical volatility, MediaTek is 1.08 times less risky than Amtran Technology. It trades about 0.06 of its potential returns per unit of risk. Amtran Technology Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 990.00 in Amtran Technology Co on August 30, 2024 and sell it today you would earn a total of 1,020 from holding Amtran Technology Co or generate 103.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaTek vs. Amtran Technology Co
Performance |
| Timeline |
| MediaTek |
| Amtran Technology |
MediaTek and Amtran Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Amtran Technology
The main advantage of trading using opposite MediaTek and Amtran Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Amtran 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 Amtran Technology will offset losses from the drop in Amtran Technology's long position.| MediaTek vs. Hon Hai Precision | MediaTek vs. United Microelectronics | MediaTek vs. LARGAN Precision Co | MediaTek vs. Delta Electronics |
| Amtran Technology vs. Yulon Finance Corp | Amtran Technology vs. Taiwan Secom Co | Amtran Technology vs. Great Wall Enterprise |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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