Correlation Between MediaTek and Optivision Technology
Can any of the company-specific risk be diversified away by investing in both MediaTek and Optivision 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 Optivision Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Optivision Technology, you can compare the effects of market volatilities on MediaTek and Optivision 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 Optivision Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Optivision Technology.
Diversification Opportunities for MediaTek and Optivision Technology
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MediaTek and Optivision is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Optivision Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optivision 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 Optivision Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optivision Technology has no effect on the direction of MediaTek i.e., MediaTek and Optivision Technology go up and down completely randomly.
Pair Corralation between MediaTek and Optivision Technology
Assuming the 90 days trading horizon MediaTek is expected to generate 1.11 times more return on investment than Optivision Technology. However, MediaTek is 1.11 times more volatile than Optivision Technology. It trades about 0.02 of its potential returns per unit of risk. Optivision Technology is currently generating about -0.05 per unit of risk. If you would invest 123,000 in MediaTek on September 3, 2024 and sell it today you would earn a total of 2,500 from holding MediaTek or generate 2.03% 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. Optivision Technology
Performance |
| Timeline |
| MediaTek |
| Optivision Technology |
MediaTek and Optivision Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Optivision Technology
The main advantage of trading using opposite MediaTek and Optivision Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Optivision 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 Optivision Technology will offset losses from the drop in Optivision Technology's long position.| MediaTek vs. Taiwan Semiconductor Manufacturing | MediaTek vs. Yang Ming Marine | MediaTek vs. ASE Industrial Holding | MediaTek vs. AU Optronics |
| Optivision Technology vs. Chung Hwa Food | Optivision Technology vs. Tehmag Foods | Optivision Technology vs. Standard Foods Corp | Optivision Technology vs. Hannstar Display 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 CEOs Directory module to screen CEOs from public companies around the world.
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