Correlation Between MediaTek and GAME HOURS
Can any of the company-specific risk be diversified away by investing in both MediaTek and GAME HOURS 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 GAME HOURS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and GAME HOURS, you can compare the effects of market volatilities on MediaTek and GAME HOURS 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 GAME HOURS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and GAME HOURS.
Diversification Opportunities for MediaTek and GAME HOURS
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MediaTek and GAME is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and GAME HOURS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAME HOURS 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 GAME HOURS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAME HOURS has no effect on the direction of MediaTek i.e., MediaTek and GAME HOURS go up and down completely randomly.
Pair Corralation between MediaTek and GAME HOURS
Assuming the 90 days trading horizon MediaTek is expected to generate 0.65 times more return on investment than GAME HOURS. However, MediaTek is 1.54 times less risky than GAME HOURS. It trades about 0.02 of its potential returns per unit of risk. GAME HOURS is currently generating about -0.05 per unit of risk. If you would invest 124,000 in MediaTek on September 2, 2024 and sell it today you would earn a total of 1,500 from holding MediaTek or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
MediaTek vs. GAME HOURS
Performance |
| Timeline |
| MediaTek |
| GAME HOURS |
MediaTek and GAME HOURS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and GAME HOURS
The main advantage of trading using opposite MediaTek and GAME HOURS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, GAME HOURS 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 GAME HOURS will offset losses from the drop in GAME HOURS's long position.| MediaTek vs. Hon Hai Precision | MediaTek vs. United Microelectronics | MediaTek vs. LARGAN Precision Co | MediaTek vs. Delta Electronics |
| GAME HOURS vs. Soft World International | GAME HOURS vs. X Legend Entertainment Co | GAME HOURS vs. Userjoy Technology Co | GAME HOURS vs. Fun Yours 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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