Correlation Between MediaTek and Kuo Toong
Can any of the company-specific risk be diversified away by investing in both MediaTek and Kuo Toong 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 Kuo Toong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaTek and Kuo Toong International, you can compare the effects of market volatilities on MediaTek and Kuo Toong 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 Kuo Toong. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Kuo Toong.
Diversification Opportunities for MediaTek and Kuo Toong
Very good diversification
The 3 months correlation between MediaTek and Kuo is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Kuo Toong International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuo Toong International 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 Kuo Toong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuo Toong International has no effect on the direction of MediaTek i.e., MediaTek and Kuo Toong go up and down completely randomly.
Pair Corralation between MediaTek and Kuo Toong
Assuming the 90 days trading horizon MediaTek is expected to generate 0.84 times more return on investment than Kuo Toong. However, MediaTek is 1.2 times less risky than Kuo Toong. It trades about 0.1 of its potential returns per unit of risk. Kuo Toong International is currently generating about 0.07 per unit of risk. If you would invest 66,900 in MediaTek on September 12, 2024 and sell it today you would earn a total of 68,100 from holding MediaTek or generate 101.79% 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. Kuo Toong International
Performance |
Timeline |
MediaTek |
Kuo Toong International |
MediaTek and Kuo Toong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MediaTek and Kuo Toong
The main advantage of trading using opposite MediaTek and Kuo Toong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Kuo Toong 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 Kuo Toong will offset losses from the drop in Kuo Toong's long position.MediaTek vs. AU Optronics | MediaTek vs. Innolux Corp | MediaTek vs. Ruentex Development Co | MediaTek vs. WiseChip Semiconductor |
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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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