Correlation Between MediaTek and FineMat Applied
Can any of the company-specific risk be diversified away by investing in both MediaTek and FineMat Applied 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 FineMat Applied into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and FineMat Applied Materials, you can compare the effects of market volatilities on MediaTek and FineMat Applied 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 FineMat Applied. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and FineMat Applied.
Diversification Opportunities for MediaTek and FineMat Applied
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MediaTek and FineMat is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and FineMat Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FineMat Applied Materials 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 FineMat Applied. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FineMat Applied Materials has no effect on the direction of MediaTek i.e., MediaTek and FineMat Applied go up and down completely randomly.
Pair Corralation between MediaTek and FineMat Applied
Assuming the 90 days trading horizon MediaTek is expected to generate 2.15 times less return on investment than FineMat Applied. But when comparing it to its historical volatility, MediaTek is 1.35 times less risky than FineMat Applied. It trades about 0.02 of its potential returns per unit of risk. FineMat Applied Materials is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,705 in FineMat Applied Materials on August 29, 2024 and sell it today you would earn a total of 165.00 from holding FineMat Applied Materials or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaTek vs. FineMat Applied Materials
Performance |
| Timeline |
| MediaTek |
| FineMat Applied Materials |
MediaTek and FineMat Applied Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and FineMat Applied
The main advantage of trading using opposite MediaTek and FineMat Applied positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, FineMat Applied 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 FineMat Applied will offset losses from the drop in FineMat Applied's long position.| MediaTek vs. Hon Hai Precision | MediaTek vs. United Microelectronics | MediaTek vs. LARGAN Precision Co | MediaTek vs. Delta Electronics |
| FineMat Applied vs. Hon Hai Precision | FineMat Applied vs. Delta Electronics | FineMat Applied vs. LARGAN Precision Co | FineMat Applied vs. E Ink Holdings |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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