Correlation Between MediaTek and Castles Technology
Can any of the company-specific risk be diversified away by investing in both MediaTek and Castles 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 Castles Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Castles Technology Co, you can compare the effects of market volatilities on MediaTek and Castles 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 Castles Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Castles Technology.
Diversification Opportunities for MediaTek and Castles Technology
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MediaTek and Castles is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Castles Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castles 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 Castles Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castles Technology has no effect on the direction of MediaTek i.e., MediaTek and Castles Technology go up and down completely randomly.
Pair Corralation between MediaTek and Castles Technology
Assuming the 90 days trading horizon MediaTek is expected to generate 0.8 times more return on investment than Castles Technology. However, MediaTek is 1.25 times less risky than Castles Technology. It trades about 0.07 of its potential returns per unit of risk. Castles Technology Co is currently generating about 0.03 per unit of risk. If you would invest 73,900 in MediaTek on October 13, 2024 and sell it today you would earn a total of 72,600 from holding MediaTek or generate 98.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
MediaTek vs. Castles Technology Co
Performance |
| Timeline |
| MediaTek |
| Castles Technology |
MediaTek and Castles Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Castles Technology
The main advantage of trading using opposite MediaTek and Castles Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Castles 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 Castles Technology will offset losses from the drop in Castles Technology's long position.| MediaTek vs. Hon Hai Precision | MediaTek vs. United Microelectronics | MediaTek vs. LARGAN Precision Co | MediaTek vs. Delta Electronics |
| Castles Technology vs. AVerMedia Technologies | Castles Technology vs. Min Aik Technology | Castles Technology vs. Jean Co | Castles Technology vs. Uniform Industrial 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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