Correlation Between MediaTek and BenQ Medical
Can any of the company-specific risk be diversified away by investing in both MediaTek and BenQ Medical 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 BenQ Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and BenQ Medical Technology, you can compare the effects of market volatilities on MediaTek and BenQ Medical 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 BenQ Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and BenQ Medical.
Diversification Opportunities for MediaTek and BenQ Medical
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MediaTek and BenQ is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and BenQ Medical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BenQ Medical 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 BenQ Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BenQ Medical Technology has no effect on the direction of MediaTek i.e., MediaTek and BenQ Medical go up and down completely randomly.
Pair Corralation between MediaTek and BenQ Medical
Assuming the 90 days trading horizon MediaTek is expected to generate 2.44 times more return on investment than BenQ Medical. However, MediaTek is 2.44 times more volatile than BenQ Medical Technology. It trades about 0.09 of its potential returns per unit of risk. BenQ Medical Technology is currently generating about -0.24 per unit of risk. If you would invest 141,000 in MediaTek on October 26, 2024 and sell it today you would earn a total of 5,500 from holding MediaTek or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaTek vs. BenQ Medical Technology
Performance |
| Timeline |
| MediaTek |
| BenQ Medical Technology |
MediaTek and BenQ Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and BenQ Medical
The main advantage of trading using opposite MediaTek and BenQ Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, BenQ Medical 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 BenQ Medical will offset losses from the drop in BenQ Medical's long position.| MediaTek vs. Hon Hai Precision | MediaTek vs. United Microelectronics | MediaTek vs. LARGAN Precision Co | MediaTek vs. Delta Electronics |
| BenQ Medical vs. Sunspring Metal Corp | BenQ Medical vs. AVer Information | BenQ Medical vs. Jentech Precision Industrial | BenQ Medical vs. Transcend Information |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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