Correlation Between MediaTek and Advanced Analog
Can any of the company-specific risk be diversified away by investing in both MediaTek and Advanced Analog 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 Advanced Analog into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Advanced Analog Technology, you can compare the effects of market volatilities on MediaTek and Advanced Analog 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 Advanced Analog. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Advanced Analog.
Diversification Opportunities for MediaTek and Advanced Analog
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MediaTek and Advanced is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Advanced Analog Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Analog Tech 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 Advanced Analog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Analog Tech has no effect on the direction of MediaTek i.e., MediaTek and Advanced Analog go up and down completely randomly.
Pair Corralation between MediaTek and Advanced Analog
Assuming the 90 days trading horizon MediaTek is expected to generate 1.04 times more return on investment than Advanced Analog. However, MediaTek is 1.04 times more volatile than Advanced Analog Technology. It trades about -0.06 of its potential returns per unit of risk. Advanced Analog Technology is currently generating about -0.29 per unit of risk. If you would invest 129,000 in MediaTek on September 2, 2024 and sell it today you would lose (3,500) from holding MediaTek or give up 2.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaTek vs. Advanced Analog Technology
Performance |
| Timeline |
| MediaTek |
| Advanced Analog Tech |
MediaTek and Advanced Analog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Advanced Analog
The main advantage of trading using opposite MediaTek and Advanced Analog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Advanced Analog 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 Advanced Analog will offset losses from the drop in Advanced Analog's long position.| MediaTek vs. Hon Hai Precision | MediaTek vs. United Microelectronics | MediaTek vs. LARGAN Precision Co | MediaTek vs. Delta Electronics |
| Advanced Analog vs. Grand Pacific Petrochemical | Advanced Analog vs. Chernan Metal Industrial | Advanced Analog vs. Chung Hwa Chemical | Advanced Analog vs. Sunspring Metal Corp |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |