Correlation Between Disney and Matthews International
Can any of the company-specific risk be diversified away by investing in both Disney 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 Disney and Matthews International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Matthews International Funds, you can compare the effects of market volatilities on Disney 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 Disney with a short position of Matthews International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Matthews International.
Diversification Opportunities for Disney and Matthews International
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Disney and Matthews is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Matthews International Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International and Disney 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 Walt Disney 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 Disney i.e., Disney and Matthews International go up and down completely randomly.
Pair Corralation between Disney and Matthews International
Considering the 90-day investment horizon Walt Disney is expected to generate 1.44 times more return on investment than Matthews International. However, Disney is 1.44 times more volatile than Matthews International Funds. It trades about 0.03 of its potential returns per unit of risk. Matthews International Funds is currently generating about -0.01 per unit of risk. If you would invest 9,518 in Walt Disney on August 25, 2024 and sell it today you would earn a total of 2,047 from holding Walt Disney or generate 21.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 69.82% |
| Values | Daily Returns |
Walt Disney vs. Matthews International Funds
Performance |
| Timeline |
| Walt Disney |
| Matthews International |
Disney and Matthews International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and Matthews International
The main advantage of trading using opposite Disney and Matthews International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney 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.| Disney vs. ADTRAN Inc | Disney vs. Belden Inc | Disney vs. ADC Therapeutics SA | Disney vs. Comtech Telecommunications Corp |
| Matthews International vs. Freedom Day Dividend | Matthews International vs. Davis Select International | Matthews International vs. iShares MSCI China | Matthews International vs. SmartETFs Dividend Builder |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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