Correlation Between IShares MSCI and Matthews International
Can any of the company-specific risk be diversified away by investing in both IShares MSCI 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 IShares MSCI and Matthews International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Emerging and Matthews International Funds, you can compare the effects of market volatilities on IShares MSCI 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 IShares MSCI with a short position of Matthews International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Matthews International.
Diversification Opportunities for IShares MSCI and Matthews International
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Matthews is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Emerging and Matthews International Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International and IShares MSCI 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 iShares MSCI Emerging 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 IShares MSCI i.e., IShares MSCI and Matthews International go up and down completely randomly.
Pair Corralation between IShares MSCI and Matthews International
Given the investment horizon of 90 days iShares MSCI Emerging is expected to generate 1.0 times more return on investment than Matthews International. However, iShares MSCI Emerging is 1.0 times less risky than Matthews International. It trades about 0.04 of its potential returns per unit of risk. Matthews International Funds is currently generating about 0.02 per unit of risk. If you would invest 6,486 in iShares MSCI Emerging on September 1, 2024 and sell it today you would earn a total of 893.00 from holding iShares MSCI Emerging or generate 13.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 80.7% |
| Values | Daily Returns |
iShares MSCI Emerging vs. Matthews International Funds
Performance |
| Timeline |
| iShares MSCI Emerging |
| Matthews International |
IShares MSCI and Matthews International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Matthews International
The main advantage of trading using opposite IShares MSCI and Matthews International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI 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.| IShares MSCI vs. iShares MSCI Emerging | IShares MSCI vs. iShares MSCI Europe | IShares MSCI vs. iShares MSCI All | IShares MSCI vs. iShares Emerging Markets |
| Matthews International vs. iShares MSCI Emerging | Matthews International vs. Global X Funds | Matthews International vs. Franklin FTSE Asia | Matthews International vs. Franklin FTSE Europe |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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