Correlation Between Matthews Asian and Matthews Asia
Can any of the company-specific risk be diversified away by investing in both Matthews Asian 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 Matthews Asian and Matthews Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews Asian Growth and Matthews Asia Innovators, you can compare the effects of market volatilities on Matthews Asian 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 Matthews Asian with a short position of Matthews Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Asian and Matthews Asia.
Diversification Opportunities for Matthews Asian and Matthews Asia
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Matthews and Matthews is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Asian Growth 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 Matthews Asian 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 Matthews Asian Growth 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 Matthews Asian i.e., Matthews Asian and Matthews Asia go up and down completely randomly.
Pair Corralation between Matthews Asian and Matthews Asia
Assuming the 90 days horizon Matthews Asian is expected to generate 1.03 times less return on investment than Matthews Asia. But when comparing it to its historical volatility, Matthews Asian Growth is 1.55 times less risky than Matthews Asia. It trades about 0.01 of its potential returns per unit of risk. Matthews Asia Innovators is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,286 in Matthews Asia Innovators on October 23, 2024 and sell it today you would earn a total of 6.00 from holding Matthews Asia Innovators or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews Asian Growth vs. Matthews Asia Innovators
Performance |
| Timeline |
| Matthews Asian Growth |
| Matthews Asia Innovators |
Matthews Asian and Matthews Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Asian and Matthews Asia
The main advantage of trading using opposite Matthews Asian and Matthews Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Asian 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.| Matthews Asian vs. Matthews Pacific Tiger | Matthews Asian vs. Matthews China Fund | Matthews Asian vs. Matthews Asia Dividend | Matthews Asian vs. Matthews Asia Growth |
| Matthews Asia vs. Matthews Asian Growth | Matthews Asia vs. Matthews China Fund | Matthews Asia vs. Matthews India Fund | Matthews Asia vs. Matthews Asia Growth |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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