Correlation Between MediaTek and Singatron Enterprise
Can any of the company-specific risk be diversified away by investing in both MediaTek and Singatron Enterprise 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 Singatron Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Singatron Enterprise Co, you can compare the effects of market volatilities on MediaTek and Singatron Enterprise 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 Singatron Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Singatron Enterprise.
Diversification Opportunities for MediaTek and Singatron Enterprise
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MediaTek and Singatron is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Singatron Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singatron Enterprise 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 Singatron Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singatron Enterprise has no effect on the direction of MediaTek i.e., MediaTek and Singatron Enterprise go up and down completely randomly.
Pair Corralation between MediaTek and Singatron Enterprise
Assuming the 90 days trading horizon MediaTek is expected to generate 3.55 times less return on investment than Singatron Enterprise. But when comparing it to its historical volatility, MediaTek is 1.62 times less risky than Singatron Enterprise. It trades about 0.03 of its potential returns per unit of risk. Singatron Enterprise Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,955 in Singatron Enterprise Co on August 28, 2024 and sell it today you would earn a total of 200.00 from holding Singatron Enterprise Co or generate 6.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaTek vs. Singatron Enterprise Co
Performance |
| Timeline |
| MediaTek |
| Singatron Enterprise |
MediaTek and Singatron Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Singatron Enterprise
The main advantage of trading using opposite MediaTek and Singatron Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Singatron Enterprise 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 Singatron Enterprise will offset losses from the drop in Singatron Enterprise's long position.| MediaTek vs. Hon Hai Precision | MediaTek vs. United Microelectronics | MediaTek vs. LARGAN Precision Co | MediaTek vs. Delta Electronics |
| Singatron Enterprise vs. Advantech Co | Singatron Enterprise vs. IEI Integration Corp | Singatron Enterprise vs. Flytech Technology Co | Singatron Enterprise 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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