Correlation Between MediaTek and Apex Biotechnology

Can any of the company-specific risk be diversified away by investing in both MediaTek and Apex Biotechnology 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 Apex Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MediaTek and Apex Biotechnology Corp, you can compare the effects of market volatilities on MediaTek and Apex Biotechnology 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 Apex Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaTek and Apex Biotechnology.

Diversification Opportunities for MediaTek and Apex Biotechnology

0.36

Correlation Coefficient

MediaTek  Apex Biotechnology

Weak diversification

The 3 months correlation between MediaTek and Apex is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding MediaTek and Apex Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Biotechnology Corp 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 Apex Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Biotechnology Corp has no effect on the direction of MediaTek i.e., MediaTek and Apex Biotechnology go up and down completely randomly.

Pair Corralation between MediaTek and Apex Biotechnology

Assuming the 90 days trading horizon MediaTek is expected to generate 1.89 times less return on investment than Apex Biotechnology. In addition to that, MediaTek is 2.06 times more volatile than Apex Biotechnology Corp. It trades about 0.05 of its total potential returns per unit of risk. Apex Biotechnology Corp is currently generating about 0.21 per unit of volatility. If you would invest  2,980  in Apex Biotechnology Corp on December 30, 2024 and sell it today you would earn a total of  375.00  from holding Apex Biotechnology Corp or generate 12.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

MediaTek  vs.  Apex Biotechnology Corp

MediaTek

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MediaTek are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, MediaTek may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Apex Biotechnology Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apex Biotechnology Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Apex Biotechnology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MediaTek and Apex Biotechnology

The main advantage of trading using opposite MediaTek and Apex Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaTek position performs unexpectedly, Apex Biotechnology 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 Apex Biotechnology will offset losses from the drop in Apex Biotechnology's long position.

The idea behind MediaTek and Apex Biotechnology Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.