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 Philippines 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
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Matthews is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Philippines 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 Philippines 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 Philippines is expected to generate 0.85 times more return on investment than Matthews International. However, iShares MSCI Philippines is 1.18 times less risky than Matthews International. It trades about 0.03 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 2,419 in iShares MSCI Philippines on September 12, 2024 and sell it today you would earn a total of 164.00 from holding iShares MSCI Philippines or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Philippines vs. Matthews International Funds
Performance |
| Timeline |
| iShares MSCI Philippines |
| 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.The idea behind iShares MSCI Philippines and Matthews International Funds pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Matthews International vs. iShares MSCI Qatar | Matthews International vs. iShares MSCI Israel | Matthews International vs. iShares MSCI Philippines |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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