Correlation Between IShares Asia and Matthews Asia
Can any of the company-specific risk be diversified away by investing in both IShares Asia and Matthews Asia 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 Asia 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 Asia Innovators, you can compare the effects of market volatilities on IShares Asia and Matthews Asia 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 Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Asia and Matthews Asia.
Diversification Opportunities for IShares Asia and Matthews Asia
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Matthews is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares Asia 50 and Matthews Asia Innovators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Asia Innovators 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 Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Asia Innovators has no effect on the direction of IShares Asia i.e., IShares Asia and Matthews Asia go up and down completely randomly.
Pair Corralation between IShares Asia and Matthews Asia
Considering the 90-day investment horizon IShares Asia is expected to generate 1.45 times less return on investment than Matthews Asia. In addition to that, IShares Asia is 1.3 times more volatile than Matthews Asia Innovators. It trades about 0.04 of its total potential returns per unit of risk. Matthews Asia Innovators is currently generating about 0.07 per unit of volatility. If you would invest 2,661 in Matthews Asia Innovators on August 28, 2024 and sell it today you would earn a total of 145.00 from holding Matthews Asia Innovators or generate 5.45% 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 Asia Innovators
Performance |
| Timeline |
| iShares Asia 50 |
| Matthews Asia Innovators |
IShares Asia and Matthews Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Asia and Matthews Asia
The main advantage of trading using opposite IShares Asia and Matthews Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Asia position performs unexpectedly, Matthews Asia 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 Asia will offset losses from the drop in Matthews Asia's long position.| IShares Asia vs. Alliancebernstein National Municipal | IShares Asia vs. Armada Hflr Pr | IShares Asia vs. Aberdeen Global Dynamic |
| Matthews Asia vs. Matthews China Active | Matthews Asia vs. MAYBANK EMERGING ETF | Matthews Asia vs. Matthews Emerging Markets | Matthews Asia vs. JP Morgan Exchange Traded |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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