Correlation Between Eaton Vance and Matthews China
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and Matthews China 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 Eaton Vance and Matthews China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Greater and Matthews China Fund, you can compare the effects of market volatilities on Eaton Vance and Matthews China 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 Eaton Vance with a short position of Matthews China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Matthews China.
Diversification Opportunities for Eaton Vance and Matthews China
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eaton and Matthews is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Greater and Matthews China Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews China and Eaton Vance 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 Eaton Vance Greater are associated (or correlated) with Matthews China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews China has no effect on the direction of Eaton Vance i.e., Eaton Vance and Matthews China go up and down completely randomly.
Pair Corralation between Eaton Vance and Matthews China
Assuming the 90 days horizon Eaton Vance is expected to generate 3.04 times less return on investment than Matthews China. But when comparing it to its historical volatility, Eaton Vance Greater is 1.2 times less risky than Matthews China. It trades about 0.02 of its potential returns per unit of risk. Matthews China Fund is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,229 in Matthews China Fund on September 1, 2024 and sell it today you would earn a total of 153.00 from holding Matthews China Fund or generate 12.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Greater vs. Matthews China Fund
Performance |
| Timeline |
| Eaton Vance Greater |
| Matthews China |
Eaton Vance and Matthews China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and Matthews China
The main advantage of trading using opposite Eaton Vance and Matthews China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, Matthews China 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 China will offset losses from the drop in Matthews China's long position.| Eaton Vance vs. Columbia Greater China | Eaton Vance vs. Guinness Atkinson China | Eaton Vance vs. Eaton Vance Greater | Eaton Vance vs. Aquagold International |
| Matthews China vs. Matthews India Fund | Matthews China vs. Matthews Pacific Tiger | Matthews China vs. Matthews Asian Growth | Matthews China vs. Guinness Atkinson China |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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