Correlation Between MediaTek and Chailease Holding
Can any of the company-specific risk be diversified away by investing in both MediaTek and Chailease Holding 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 Chailease Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Chailease Holding Co, you can compare the effects of market volatilities on MediaTek and Chailease Holding 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 Chailease Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Chailease Holding.
Diversification Opportunities for MediaTek and Chailease Holding
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MediaTek and Chailease is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Chailease Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chailease Holding 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 Chailease Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chailease Holding has no effect on the direction of MediaTek i.e., MediaTek and Chailease Holding go up and down completely randomly.
Pair Corralation between MediaTek and Chailease Holding
Assuming the 90 days trading horizon MediaTek is expected to generate 1.29 times more return on investment than Chailease Holding. However, MediaTek is 1.29 times more volatile than Chailease Holding Co. It trades about 0.06 of its potential returns per unit of risk. Chailease Holding Co is currently generating about -0.05 per unit of risk. If you would invest 73,900 in MediaTek on August 24, 2024 and sell it today you would earn a total of 57,100 from holding MediaTek or generate 77.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
MediaTek vs. Chailease Holding Co
Performance |
| Timeline |
| MediaTek |
| Chailease Holding |
MediaTek and Chailease Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Chailease Holding
The main advantage of trading using opposite MediaTek and Chailease Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Chailease Holding 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 Chailease Holding will offset losses from the drop in Chailease Holding's long position.| MediaTek vs. Novatek Microelectronics Corp | MediaTek vs. Quanta Computer | MediaTek vs. United Microelectronics |
| Chailease Holding vs. Fubon Financial Holding | Chailease Holding vs. Cathay Financial Holding | Chailease Holding vs. ESUN Financial Holding |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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