Correlation Between Matthews Korea and Wisdomtree Floating
Can any of the company-specific risk be diversified away by investing in both Matthews Korea and Wisdomtree Floating 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 Korea and Wisdomtree Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews Korea Fund and Wisdomtree Floating Rate, you can compare the effects of market volatilities on Matthews Korea and Wisdomtree Floating 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 Korea with a short position of Wisdomtree Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Korea and Wisdomtree Floating.
Diversification Opportunities for Matthews Korea and Wisdomtree Floating
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Matthews and Wisdomtree is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Korea Fund and Wisdomtree Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisdomtree Floating Rate and Matthews Korea 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 Korea Fund are associated (or correlated) with Wisdomtree Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisdomtree Floating Rate has no effect on the direction of Matthews Korea i.e., Matthews Korea and Wisdomtree Floating go up and down completely randomly.
Pair Corralation between Matthews Korea and Wisdomtree Floating
If you would invest 99.00 in Wisdomtree Floating Rate on August 26, 2024 and sell it today you would earn a total of 2.00 from holding Wisdomtree Floating Rate or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.79% |
| Values | Daily Returns |
Matthews Korea Fund vs. Wisdomtree Floating Rate
Performance |
| Timeline |
| Matthews Korea |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Wisdomtree Floating Rate |
Matthews Korea and Wisdomtree Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Korea and Wisdomtree Floating
The main advantage of trading using opposite Matthews Korea and Wisdomtree Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Korea position performs unexpectedly, Wisdomtree Floating 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 Wisdomtree Floating will offset losses from the drop in Wisdomtree Floating's long position.| Matthews Korea vs. Matthews Japan Fund | Matthews Korea vs. Matthews Pacific Tiger | Matthews Korea vs. Matthews Asia Innovators | Matthews Korea vs. Matthews Asian Growth |
| Wisdomtree Floating vs. Wisdomtree Digital Trust | Wisdomtree Floating vs. Wisdomtree Digital Trust | Wisdomtree Floating vs. Wisdomtree Digital Trust | Wisdomtree Floating vs. Wisdomtree Digital Trust |
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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