Correlation Between Fidelity China and Matthews China
Can any of the company-specific risk be diversified away by investing in both Fidelity China 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 Fidelity China and Matthews China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity China Region and Matthews China Dividend, you can compare the effects of market volatilities on Fidelity China 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 Fidelity China with a short position of Matthews China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity China and Matthews China.
Diversification Opportunities for Fidelity China and Matthews China
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Fidelity and Matthews is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity China Region and Matthews China Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews China Dividend and Fidelity China 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 Fidelity China Region 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 Dividend has no effect on the direction of Fidelity China i.e., Fidelity China and Matthews China go up and down completely randomly.
Pair Corralation between Fidelity China and Matthews China
Assuming the 90 days horizon Fidelity China Region is expected to generate 0.95 times more return on investment than Matthews China. However, Fidelity China Region is 1.05 times less risky than Matthews China. It trades about 0.04 of its potential returns per unit of risk. Matthews China Dividend is currently generating about -0.01 per unit of risk. If you would invest 3,197 in Fidelity China Region on August 26, 2024 and sell it today you would earn a total of 651.00 from holding Fidelity China Region or generate 20.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity China Region vs. Matthews China Dividend
Performance |
| Timeline |
| Fidelity China Region |
| Matthews China Dividend |
Fidelity China and Matthews China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity China and Matthews China
The main advantage of trading using opposite Fidelity China and Matthews China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity China 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.| Fidelity China vs. Artisan Emerging Markets | Fidelity China vs. Angel Oak Multi Strategy | Fidelity China vs. Black Oak Emerging | Fidelity China vs. Nasdaq 100 2x Strategy |
| Matthews China vs. Fidelity China Region | Matthews China vs. Fidelity China Region | Matthews China vs. Matthews China Fund | Matthews China vs. Matthews China Small |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |