Correlation Between Alliance Global and Matthews International
Can any of the company-specific risk be diversified away by investing in both Alliance Global and Matthews International 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 Alliance Global and Matthews International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Global Group and Matthews International, you can compare the effects of market volatilities on Alliance Global and Matthews International 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 Alliance Global with a short position of Matthews International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Global and Matthews International.
Diversification Opportunities for Alliance Global and Matthews International
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alliance and Matthews is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Global Group and Matthews International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International and Alliance Global 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 Alliance Global Group are associated (or correlated) with Matthews International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews International has no effect on the direction of Alliance Global i.e., Alliance Global and Matthews International go up and down completely randomly.
Pair Corralation between Alliance Global and Matthews International
Assuming the 90 days horizon Alliance Global Group is expected to generate 1.35 times more return on investment than Matthews International. However, Alliance Global is 1.35 times more volatile than Matthews International. It trades about -0.08 of its potential returns per unit of risk. Matthews International is currently generating about -0.2 per unit of risk. If you would invest 731.00 in Alliance Global Group on November 18, 2024 and sell it today you would lose (78.00) from holding Alliance Global Group or give up 10.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliance Global Group vs. Matthews International
Performance |
| Timeline |
| Alliance Global Group |
| Matthews International |
Alliance Global and Matthews International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Global and Matthews International
The main advantage of trading using opposite Alliance Global and Matthews International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Global position performs unexpectedly, Matthews International 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 International will offset losses from the drop in Matthews International's long position.| Alliance Global vs. Alliance Recovery | Alliance Global vs. Ayala | Alliance Global vs. Alaska Power Telephone | Alliance Global vs. RCABS Inc |
| Matthews International vs. Steel Partners Holdings | Matthews International vs. Compass Diversified | Matthews International vs. Brookfield Business Partners | Matthews International vs. Tejon Ranch Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |