Correlation Between MediaTek and Wafer Works
Can any of the company-specific risk be diversified away by investing in both MediaTek and Wafer Works 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 Wafer Works into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Wafer Works, you can compare the effects of market volatilities on MediaTek and Wafer Works 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 Wafer Works. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Wafer Works.
Diversification Opportunities for MediaTek and Wafer Works
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MediaTek and Wafer is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Wafer Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wafer Works 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 Wafer Works. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wafer Works has no effect on the direction of MediaTek i.e., MediaTek and Wafer Works go up and down completely randomly.
Pair Corralation between MediaTek and Wafer Works
Assuming the 90 days trading horizon MediaTek is expected to generate 1.51 times more return on investment than Wafer Works. However, MediaTek is 1.51 times more volatile than Wafer Works. It trades about 0.09 of its potential returns per unit of risk. Wafer Works is currently generating about -0.07 per unit of risk. If you would invest 69,200 in MediaTek on September 12, 2024 and sell it today you would earn a total of 65,800 from holding MediaTek or generate 95.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaTek vs. Wafer Works
Performance |
| Timeline |
| MediaTek |
| Wafer Works |
MediaTek and Wafer Works Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Wafer Works
The main advantage of trading using opposite MediaTek and Wafer Works positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Wafer Works 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 Wafer Works will offset losses from the drop in Wafer Works' long position.| MediaTek vs. AU Optronics | MediaTek vs. Innolux Corp | MediaTek vs. Ruentex Development Co | MediaTek vs. WiseChip Semiconductor |
| Wafer Works vs. Sino American Silicon Products | Wafer Works vs. GlobalWafers Co | Wafer Works vs. Motech Industries Co | Wafer Works vs. Formosa Sumco 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |