Correlation Between MediaTek and Fun Yours
Can any of the company-specific risk be diversified away by investing in both MediaTek and Fun Yours 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 Fun Yours into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Fun Yours Technology, you can compare the effects of market volatilities on MediaTek and Fun Yours 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 Fun Yours. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Fun Yours.
Diversification Opportunities for MediaTek and Fun Yours
Excellent diversification
The 3 months correlation between MediaTek and Fun is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Fun Yours Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fun Yours Technology 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 Fun Yours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fun Yours Technology has no effect on the direction of MediaTek i.e., MediaTek and Fun Yours go up and down completely randomly.
Pair Corralation between MediaTek and Fun Yours
Assuming the 90 days trading horizon MediaTek is expected to generate 2.27 times less return on investment than Fun Yours. But when comparing it to its historical volatility, MediaTek is 4.29 times less risky than Fun Yours. It trades about 0.06 of its potential returns per unit of risk. Fun Yours Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,094 in Fun Yours Technology on September 2, 2024 and sell it today you would lose (1,084) from holding Fun Yours Technology or give up 17.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaTek vs. Fun Yours Technology
Performance |
| Timeline |
| MediaTek |
| Fun Yours Technology |
MediaTek and Fun Yours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Fun Yours
The main advantage of trading using opposite MediaTek and Fun Yours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Fun Yours 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 Fun Yours will offset losses from the drop in Fun Yours' long position.| MediaTek vs. Hon Hai Precision | MediaTek vs. United Microelectronics | MediaTek vs. LARGAN Precision Co | MediaTek vs. Delta Electronics |
| Fun Yours vs. Chunghwa Telecom Co | Fun Yours vs. President Chain Store | Fun Yours vs. Formosa Petrochemical Corp | Fun Yours vs. Formosa Chemicals Fibre |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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