Correlation Between IShares Asia and Matthews China
Can any of the company-specific risk be diversified away by investing in both IShares Asia and Matthews China 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 IShares Asia and Matthews China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Asia 50 and Matthews China Active, you can compare the effects of market volatilities on IShares Asia and Matthews China 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 IShares Asia with a short position of Matthews China. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Asia and Matthews China.
Diversification Opportunities for IShares Asia and Matthews China
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Matthews is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding iShares Asia 50 and Matthews China Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews China Active and IShares Asia 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 iShares Asia 50 are associated (or correlated) with Matthews China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews China Active has no effect on the direction of IShares Asia i.e., IShares Asia and Matthews China go up and down completely randomly.
Pair Corralation between IShares Asia and Matthews China
Considering the 90-day investment horizon iShares Asia 50 is expected to under-perform the Matthews China. But the etf apears to be less risky and, when comparing its historical volatility, iShares Asia 50 is 2.09 times less risky than Matthews China. The etf trades about -0.03 of its potential returns per unit of risk. The Matthews China Active is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,124 in Matthews China Active on August 25, 2024 and sell it today you would earn a total of 92.00 from holding Matthews China Active or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Asia 50 vs. Matthews China Active
Performance |
| Timeline |
| iShares Asia 50 |
| Matthews China Active |
IShares Asia and Matthews China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Asia and Matthews China
The main advantage of trading using opposite IShares Asia and Matthews China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Asia position performs unexpectedly, Matthews China 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 China will offset losses from the drop in Matthews China's long position.| IShares Asia vs. Matthews China Active | IShares Asia vs. MAYBANK EMERGING ETF | IShares Asia vs. Matthews Emerging Markets | IShares Asia vs. JP Morgan Exchange Traded |
| Matthews China vs. iShares MSCI Singapore | Matthews China vs. iShares MSCI Taiwan | Matthews China vs. iShares MSCI Malaysia | Matthews China vs. iShares MSCI Australia |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |