Correlation Between Emerald Banking and Matthews Japan
Can any of the company-specific risk be diversified away by investing in both Emerald Banking and Matthews Japan 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 Emerald Banking and Matthews Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerald Banking And and Matthews Japan Fund, you can compare the effects of market volatilities on Emerald Banking and Matthews Japan 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 Emerald Banking with a short position of Matthews Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerald Banking and Matthews Japan.
Diversification Opportunities for Emerald Banking and Matthews Japan
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emerald and Matthews is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Banking And and Matthews Japan Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Japan and Emerald Banking 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 Emerald Banking And are associated (or correlated) with Matthews Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Japan has no effect on the direction of Emerald Banking i.e., Emerald Banking and Matthews Japan go up and down completely randomly.
Pair Corralation between Emerald Banking and Matthews Japan
Assuming the 90 days horizon Emerald Banking And is expected to generate 1.41 times more return on investment than Matthews Japan. However, Emerald Banking is 1.41 times more volatile than Matthews Japan Fund. It trades about 0.05 of its potential returns per unit of risk. Matthews Japan Fund is currently generating about 0.05 per unit of risk. If you would invest 1,763 in Emerald Banking And on August 30, 2024 and sell it today you would earn a total of 720.00 from holding Emerald Banking And or generate 40.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerald Banking And vs. Matthews Japan Fund
Performance |
| Timeline |
| Emerald Banking And |
| Matthews Japan |
Emerald Banking and Matthews Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerald Banking and Matthews Japan
The main advantage of trading using opposite Emerald Banking and Matthews Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerald Banking position performs unexpectedly, Matthews Japan 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 Japan will offset losses from the drop in Matthews Japan's long position.| Emerald Banking vs. HUMANA INC | Emerald Banking vs. Aquagold International | Emerald Banking vs. Barloworld Ltd ADR | Emerald Banking vs. Morningstar Unconstrained Allocation |
| Matthews Japan vs. Hennessy Japan Fund | Matthews Japan vs. Matthews India Fund | Matthews Japan vs. Hennessy Japan Fund | Matthews Japan vs. Matthews Asia Dividend |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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