Correlation Between MediaTek and Giant Manufacturing
Can any of the company-specific risk be diversified away by investing in both MediaTek and Giant Manufacturing 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 Giant Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Giant Manufacturing Co, you can compare the effects of market volatilities on MediaTek and Giant Manufacturing 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 Giant Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Giant Manufacturing.
Diversification Opportunities for MediaTek and Giant Manufacturing
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MediaTek and Giant is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Giant Manufacturing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giant Manufacturing 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 Giant Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giant Manufacturing has no effect on the direction of MediaTek i.e., MediaTek and Giant Manufacturing go up and down completely randomly.
Pair Corralation between MediaTek and Giant Manufacturing
Assuming the 90 days trading horizon MediaTek is expected to generate 1.2 times more return on investment than Giant Manufacturing. However, MediaTek is 1.2 times more volatile than Giant Manufacturing Co. It trades about 0.08 of its potential returns per unit of risk. Giant Manufacturing Co is currently generating about -0.09 per unit of risk. If you would invest 99,200 in MediaTek on August 28, 2024 and sell it today you would earn a total of 28,800 from holding MediaTek or generate 29.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaTek vs. Giant Manufacturing Co
Performance |
| Timeline |
| MediaTek |
| Giant Manufacturing |
MediaTek and Giant Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaTek and Giant Manufacturing
The main advantage of trading using opposite MediaTek and Giant Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Giant Manufacturing 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 Giant Manufacturing will offset losses from the drop in Giant Manufacturing's long position.| MediaTek vs. Hon Hai Precision | MediaTek vs. United Microelectronics | MediaTek vs. LARGAN Precision Co | MediaTek vs. Delta Electronics |
| Giant Manufacturing vs. Taiwan Semiconductor Manufacturing | Giant Manufacturing vs. Hon Hai Precision | Giant Manufacturing vs. MediaTek | Giant Manufacturing 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |