Correlation Between Capital Income and Matthews India
Can any of the company-specific risk be diversified away by investing in both Capital Income 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 Capital Income and Matthews India into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Income Builder and Matthews India Fund, you can compare the effects of market volatilities on Capital Income 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 Capital Income with a short position of Matthews India. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Income and Matthews India.
Diversification Opportunities for Capital Income and Matthews India
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capital and Matthews is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Capital Income Builder and Matthews India Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews India and Capital Income 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 Capital Income Builder 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 Capital Income i.e., Capital Income and Matthews India go up and down completely randomly.
Pair Corralation between Capital Income and Matthews India
Assuming the 90 days horizon Capital Income Builder is expected to generate 0.5 times more return on investment than Matthews India. However, Capital Income Builder is 1.98 times less risky than Matthews India. It trades about 0.26 of its potential returns per unit of risk. Matthews India Fund is currently generating about -0.35 per unit of risk. If you would invest 6,893 in Capital Income Builder on November 3, 2024 and sell it today you would earn a total of 206.00 from holding Capital Income Builder or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Income Builder vs. Matthews India Fund
Performance |
| Timeline |
| Capital Income Builder |
| Matthews India |
Capital Income and Matthews India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Income and Matthews India
The main advantage of trading using opposite Capital Income and Matthews India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Income 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.| Capital Income vs. Dws Global Macro | Capital Income vs. Rbb Fund | Capital Income vs. Kinetics Global Fund | Capital Income vs. Ms Global Fixed |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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