Correlation Between Apple and Matthews India
Can any of the company-specific risk be diversified away by investing in both Apple and Matthews India 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 Apple and Matthews India into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Matthews India Fund, you can compare the effects of market volatilities on Apple and Matthews India 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 Apple with a short position of Matthews India. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Matthews India.
Diversification Opportunities for Apple and Matthews India
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and Matthews is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Matthews India Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews India and Apple 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 Apple Inc are associated (or correlated) with Matthews India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews India has no effect on the direction of Apple i.e., Apple and Matthews India go up and down completely randomly.
Pair Corralation between Apple and Matthews India
Given the investment horizon of 90 days Apple Inc is expected to under-perform the Matthews India. In addition to that, Apple is 1.24 times more volatile than Matthews India Fund. It trades about -0.39 of its total potential returns per unit of risk. Matthews India Fund is currently generating about -0.33 per unit of volatility. If you would invest 2,555 in Matthews India Fund on October 24, 2024 and sell it today you would lose (176.00) from holding Matthews India Fund or give up 6.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Matthews India Fund
Performance |
| Timeline |
| Apple Inc |
| Matthews India |
Apple and Matthews India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Matthews India
The main advantage of trading using opposite Apple and Matthews India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Matthews India 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 Matthews India will offset losses from the drop in Matthews India's long position.The idea behind Apple Inc and Matthews India Fund 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.| Matthews India vs. Matthews China Fund | Matthews India vs. Matthews Pacific Tiger | Matthews India vs. Eaton Vance Greater | Matthews India vs. Morgan Stanley India |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| 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 | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |