Correlation Between MediaTek and Dawushan Farm
Can any of the company-specific risk be diversified away by investing in both MediaTek and Dawushan Farm 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 Dawushan Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Dawushan Farm Tech, you can compare the effects of market volatilities on MediaTek and Dawushan Farm 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 Dawushan Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Dawushan Farm.
Diversification Opportunities for MediaTek and Dawushan Farm
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MediaTek and Dawushan is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Dawushan Farm Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dawushan Farm Tech 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 Dawushan Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dawushan Farm Tech has no effect on the direction of MediaTek i.e., MediaTek and Dawushan Farm go up and down completely randomly.
Pair Corralation between MediaTek and Dawushan Farm
Assuming the 90 days trading horizon MediaTek is expected to generate 3.02 times more return on investment than Dawushan Farm. However, MediaTek is 3.02 times more volatile than Dawushan Farm Tech. It trades about 0.13 of its potential returns per unit of risk. Dawushan Farm Tech is currently generating about 0.1 per unit of risk. If you would invest 139,090 in MediaTek on October 30, 2024 and sell it today you would earn a total of 7,410 from holding MediaTek or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaTek vs. Dawushan Farm Tech
Performance |
| Timeline |
| MediaTek |
| Dawushan Farm Tech |
MediaTek and Dawushan Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Dawushan Farm
The main advantage of trading using opposite MediaTek and Dawushan Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Dawushan Farm 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 Dawushan Farm will offset losses from the drop in Dawushan Farm's long position.| MediaTek vs. Hon Hai Precision | MediaTek vs. United Microelectronics | MediaTek vs. LARGAN Precision Co | MediaTek vs. Delta Electronics |
| Dawushan Farm vs. Taiwan Semiconductor Manufacturing | Dawushan Farm vs. Hon Hai Precision | Dawushan Farm vs. MediaTek | Dawushan Farm vs. Chunghwa Telecom Co |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |