Correlation Between MediaTek and Shin Ruenn
Can any of the company-specific risk be diversified away by investing in both MediaTek and Shin Ruenn 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 Shin Ruenn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Shin Ruenn Development, you can compare the effects of market volatilities on MediaTek and Shin Ruenn 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 Shin Ruenn. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Shin Ruenn.
Diversification Opportunities for MediaTek and Shin Ruenn
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MediaTek and Shin is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Shin Ruenn Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Ruenn Development 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 Shin Ruenn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Ruenn Development has no effect on the direction of MediaTek i.e., MediaTek and Shin Ruenn go up and down completely randomly.
Pair Corralation between MediaTek and Shin Ruenn
Assuming the 90 days trading horizon MediaTek is expected to generate 0.89 times more return on investment than Shin Ruenn. However, MediaTek is 1.12 times less risky than Shin Ruenn. It trades about 0.08 of its potential returns per unit of risk. Shin Ruenn Development is currently generating about -0.06 per unit of risk. If you would invest 125,000 in MediaTek on September 5, 2024 and sell it today you would earn a total of 7,000 from holding MediaTek or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaTek vs. Shin Ruenn Development
Performance |
| Timeline |
| MediaTek |
| Shin Ruenn Development |
MediaTek and Shin Ruenn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Shin Ruenn
The main advantage of trading using opposite MediaTek and Shin Ruenn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Shin Ruenn 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 Shin Ruenn will offset losses from the drop in Shin Ruenn's long position.| MediaTek vs. Hon Hai Precision | MediaTek vs. United Microelectronics | MediaTek vs. LARGAN Precision Co | MediaTek vs. Delta Electronics |
| Shin Ruenn vs. Highwealth Construction Corp | Shin Ruenn vs. Kunyue Development Co | Shin Ruenn vs. Leatec Fine Ceramics | Shin Ruenn vs. Information Technology Total |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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