Correlation Between MediaTek and Azion
Can any of the company-specific risk be diversified away by investing in both MediaTek and Azion 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 Azion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Azion, you can compare the effects of market volatilities on MediaTek and Azion 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 Azion. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Azion.
Diversification Opportunities for MediaTek and Azion
Good diversification
The 3 months correlation between MediaTek and Azion is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Azion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azion 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 Azion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azion has no effect on the direction of MediaTek i.e., MediaTek and Azion go up and down completely randomly.
Pair Corralation between MediaTek and Azion
Assuming the 90 days trading horizon MediaTek is expected to generate 0.71 times more return on investment than Azion. However, MediaTek is 1.42 times less risky than Azion. It trades about 0.32 of its potential returns per unit of risk. Azion is currently generating about 0.09 per unit of risk. If you would invest 123,500 in MediaTek on September 15, 2024 and sell it today you would earn a total of 17,500 from holding MediaTek or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MediaTek vs. Azion
Performance |
| Timeline |
| MediaTek |
| Azion |
MediaTek and Azion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Azion
The main advantage of trading using opposite MediaTek and Azion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Azion 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 Azion will offset losses from the drop in Azion's long position.| MediaTek vs. AU Optronics | MediaTek vs. Innolux Corp | MediaTek vs. Ruentex Development Co | MediaTek vs. WiseChip Semiconductor |
| Azion vs. AVerMedia Technologies | Azion vs. MediaTek | Azion vs. Pili International Multimedia | Azion vs. Sun Max Tech |
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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