Correlation Between SPDR SP and Matthews Asia
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Matthews Asia 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 SPDR SP and Matthews Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Emerging and Matthews Asia Innovators, you can compare the effects of market volatilities on SPDR SP and Matthews Asia 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 SPDR SP with a short position of Matthews Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Matthews Asia.
Diversification Opportunities for SPDR SP and Matthews Asia
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Matthews is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Emerging and Matthews Asia Innovators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Asia Innovators and SPDR SP 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 SPDR SP Emerging are associated (or correlated) with Matthews Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Asia Innovators has no effect on the direction of SPDR SP i.e., SPDR SP and Matthews Asia go up and down completely randomly.
Pair Corralation between SPDR SP and Matthews Asia
Considering the 90-day investment horizon SPDR SP Emerging is expected to under-perform the Matthews Asia. But the etf apears to be less risky and, when comparing its historical volatility, SPDR SP Emerging is 1.26 times less risky than Matthews Asia. The etf trades about -0.19 of its potential returns per unit of risk. The Matthews Asia Innovators is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 2,868 in Matthews Asia Innovators on August 28, 2024 and sell it today you would lose (62.00) from holding Matthews Asia Innovators or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Emerging vs. Matthews Asia Innovators
Performance |
| Timeline |
| SPDR SP Emerging |
| Matthews Asia Innovators |
SPDR SP and Matthews Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Matthews Asia
The main advantage of trading using opposite SPDR SP and Matthews Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Matthews Asia 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 Asia will offset losses from the drop in Matthews Asia's long position.| SPDR SP vs. Matthews China Active | SPDR SP vs. MAYBANK EMERGING ETF | SPDR SP vs. Matthews Emerging Markets | SPDR SP vs. JP Morgan Exchange Traded |
| Matthews Asia vs. Matthews China Active | Matthews Asia vs. MAYBANK EMERGING ETF | Matthews Asia vs. Matthews Emerging Markets | Matthews Asia vs. JP Morgan Exchange Traded |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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