Correlation Between MediaTek and New Advanced
Can any of the company-specific risk be diversified away by investing in both MediaTek and New Advanced 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 New Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and New Advanced Electronics, you can compare the effects of market volatilities on MediaTek and New Advanced 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 New Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and New Advanced.
Diversification Opportunities for MediaTek and New Advanced
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MediaTek and New is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and New Advanced Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Advanced 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 New Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Advanced Electronics has no effect on the direction of MediaTek i.e., MediaTek and New Advanced go up and down completely randomly.
Pair Corralation between MediaTek and New Advanced
Assuming the 90 days trading horizon MediaTek is expected to generate 1.18 times more return on investment than New Advanced. However, MediaTek is 1.18 times more volatile than New Advanced Electronics. It trades about 0.09 of its potential returns per unit of risk. New Advanced Electronics is currently generating about -0.06 per unit of risk. If you would invest 66,800 in MediaTek on August 26, 2024 and sell it today you would earn a total of 64,200 from holding MediaTek or generate 96.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaTek vs. New Advanced Electronics
Performance |
| Timeline |
| MediaTek |
| New Advanced Electronics |
MediaTek and New Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and New Advanced
The main advantage of trading using opposite MediaTek and New Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, New Advanced 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 New Advanced will offset losses from the drop in New Advanced's long position.| MediaTek vs. Novatek Microelectronics Corp | MediaTek vs. Quanta Computer | MediaTek vs. United Microelectronics |
| New Advanced vs. Advantech Co | New Advanced vs. IEI Integration Corp | New Advanced vs. Flytech Technology Co | New Advanced vs. ADLINK Technology |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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