Correlation Between FT Vest and Matthews Emerging
Can any of the company-specific risk be diversified away by investing in both FT Vest and Matthews Emerging 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 FT Vest and Matthews Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FT Vest Equity and Matthews Emerging Markets, you can compare the effects of market volatilities on FT Vest and Matthews Emerging 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 FT Vest with a short position of Matthews Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Vest and Matthews Emerging.
Diversification Opportunities for FT Vest and Matthews Emerging
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between DHDG and Matthews is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding FT Vest Equity and Matthews Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Emerging Markets and FT Vest 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 FT Vest Equity are associated (or correlated) with Matthews Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Emerging Markets has no effect on the direction of FT Vest i.e., FT Vest and Matthews Emerging go up and down completely randomly.
Pair Corralation between FT Vest and Matthews Emerging
Given the investment horizon of 90 days FT Vest Equity is expected to generate 0.59 times more return on investment than Matthews Emerging. However, FT Vest Equity is 1.71 times less risky than Matthews Emerging. It trades about -0.03 of its potential returns per unit of risk. Matthews Emerging Markets is currently generating about -0.04 per unit of risk. If you would invest 3,038 in FT Vest Equity on January 10, 2025 and sell it today you would lose (69.00) from holding FT Vest Equity or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 37.7% |
| Values | Daily Returns |
FT Vest Equity vs. Matthews Emerging Markets
Performance |
| Timeline |
| FT Vest Equity |
| Matthews Emerging Markets |
FT Vest and Matthews Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FT Vest and Matthews Emerging
The main advantage of trading using opposite FT Vest and Matthews Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT Vest position performs unexpectedly, Matthews Emerging 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 Emerging will offset losses from the drop in Matthews Emerging's long position.| FT Vest vs. Northern Lights | FT Vest vs. Dimensional International High | FT Vest vs. First Trust Exchange Traded | FT Vest vs. EA Series Trust |
| Matthews Emerging vs. Matthews China Discovery | Matthews Emerging vs. Morgan Stanley Pathway | Matthews Emerging vs. Neuberger Berman ETF | Matthews Emerging vs. Fidelity Small Mid Cap |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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