Correlation Between MediaTek and Progate
Can any of the company-specific risk be diversified away by investing in both MediaTek and Progate 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 Progate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Progate Group, you can compare the effects of market volatilities on MediaTek and Progate 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 Progate. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Progate.
Diversification Opportunities for MediaTek and Progate
Very good diversification
The 3 months correlation between MediaTek and Progate is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Progate Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progate Group 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 Progate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progate Group has no effect on the direction of MediaTek i.e., MediaTek and Progate go up and down completely randomly.
Pair Corralation between MediaTek and Progate
Assuming the 90 days trading horizon MediaTek is expected to generate 0.62 times more return on investment than Progate. However, MediaTek is 1.63 times less risky than Progate. It trades about -0.09 of its potential returns per unit of risk. Progate Group is currently generating about -0.16 per unit of risk. If you would invest 130,000 in MediaTek on August 30, 2024 and sell it today you would lose (5,000) from holding MediaTek or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaTek vs. Progate Group
Performance |
| Timeline |
| MediaTek |
| Progate Group |
MediaTek and Progate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Progate
The main advantage of trading using opposite MediaTek and Progate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Progate 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 Progate will offset losses from the drop in Progate's long position.| MediaTek vs. Hon Hai Precision | MediaTek vs. United Microelectronics | MediaTek vs. LARGAN Precision Co | MediaTek vs. Delta Electronics |
| Progate vs. Taiwan Semiconductor Manufacturing | Progate vs. Hon Hai Precision | Progate vs. MediaTek | Progate 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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