Correlation Between Matthews International and Tidal ETF
Can any of the company-specific risk be diversified away by investing in both Matthews International and Tidal ETF 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 Matthews International and Tidal ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews International Funds and Tidal ETF Trust, you can compare the effects of market volatilities on Matthews International and Tidal ETF 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 Matthews International with a short position of Tidal ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews International and Tidal ETF.
Diversification Opportunities for Matthews International and Tidal ETF
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Matthews and Tidal is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Matthews International Funds and Tidal ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal ETF Trust and Matthews International 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 Matthews International Funds are associated (or correlated) with Tidal ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal ETF Trust has no effect on the direction of Matthews International i.e., Matthews International and Tidal ETF go up and down completely randomly.
Pair Corralation between Matthews International and Tidal ETF
Given the investment horizon of 90 days Matthews International Funds is expected to generate 1.37 times more return on investment than Tidal ETF. However, Matthews International is 1.37 times more volatile than Tidal ETF Trust. It trades about 0.04 of its potential returns per unit of risk. Tidal ETF Trust is currently generating about 0.04 per unit of risk. If you would invest 2,475 in Matthews International Funds on September 12, 2024 and sell it today you would earn a total of 252.00 from holding Matthews International Funds or generate 10.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews International Funds vs. Tidal ETF Trust
Performance |
| Timeline |
| Matthews International |
| Tidal ETF Trust |
Matthews International and Tidal ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews International and Tidal ETF
The main advantage of trading using opposite Matthews International and Tidal ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews International position performs unexpectedly, Tidal ETF 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 Tidal ETF will offset losses from the drop in Tidal ETF's long position.| Matthews International vs. Tidal ETF Trust | Matthews International vs. Vanguard Minimum Volatility | Matthews International vs. Invesco SP Emerging | Matthews International vs. iShares MSCI Emerging |
| Tidal ETF vs. Vanguard Minimum Volatility | Tidal ETF vs. Invesco SP Emerging | Tidal ETF vs. iShares MSCI Emerging | Tidal ETF vs. iShares MSCI Emerging |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |