Correlation Between MediaTek and Hi Sharp
Can any of the company-specific risk be diversified away by investing in both MediaTek and Hi Sharp 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 Hi Sharp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Hi Sharp Electronics, you can compare the effects of market volatilities on MediaTek and Hi Sharp 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 Hi Sharp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Hi Sharp.
Diversification Opportunities for MediaTek and Hi Sharp
Very good diversification
The 3 months correlation between MediaTek and 3128 is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Hi Sharp Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Sharp Electronics 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 Hi Sharp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Sharp Electronics has no effect on the direction of MediaTek i.e., MediaTek and Hi Sharp go up and down completely randomly.
Pair Corralation between MediaTek and Hi Sharp
Assuming the 90 days trading horizon MediaTek is expected to generate 1.1 times more return on investment than Hi Sharp. However, MediaTek is 1.1 times more volatile than Hi Sharp Electronics. It trades about 0.09 of its potential returns per unit of risk. Hi Sharp Electronics is currently generating about -0.04 per unit of risk. If you would invest 69,700 in MediaTek on August 28, 2024 and sell it today you would earn a total of 58,300 from holding MediaTek or generate 83.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
MediaTek vs. Hi Sharp Electronics
Performance |
| Timeline |
| MediaTek |
| Hi Sharp Electronics |
MediaTek and Hi Sharp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Hi Sharp
The main advantage of trading using opposite MediaTek and Hi Sharp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Hi Sharp 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 Hi Sharp will offset losses from the drop in Hi Sharp's long position.The idea behind MediaTek and Hi Sharp Electronics 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.| Hi Sharp vs. Taiwan Secom Co | Hi Sharp vs. Taiwan Shin Kong | Hi Sharp vs. AVer Information | Hi Sharp vs. GeoVision |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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