Correlation Between Matthews Asia and Matthews India
Can any of the company-specific risk be diversified away by investing in both Matthews Asia and Matthews India 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 Asia and Matthews India into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews Asia Dividend and Matthews India Fund, you can compare the effects of market volatilities on Matthews Asia and Matthews India 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 Asia with a short position of Matthews India. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Asia and Matthews India.
Diversification Opportunities for Matthews Asia and Matthews India
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Matthews and Matthews is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Asia Dividend and Matthews India Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews India and Matthews Asia 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 Asia Dividend are associated (or correlated) with Matthews India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews India has no effect on the direction of Matthews Asia i.e., Matthews Asia and Matthews India go up and down completely randomly.
Pair Corralation between Matthews Asia and Matthews India
Assuming the 90 days horizon Matthews Asia Dividend is expected to generate 0.76 times more return on investment than Matthews India. However, Matthews Asia Dividend is 1.31 times less risky than Matthews India. It trades about 0.02 of its potential returns per unit of risk. Matthews India Fund is currently generating about -0.35 per unit of risk. If you would invest 1,407 in Matthews Asia Dividend on November 3, 2024 and sell it today you would earn a total of 4.00 from holding Matthews Asia Dividend or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews Asia Dividend vs. Matthews India Fund
Performance |
| Timeline |
| Matthews Asia Dividend |
| Matthews India |
Matthews Asia and Matthews India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Asia and Matthews India
The main advantage of trading using opposite Matthews Asia and Matthews India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Asia position performs unexpectedly, Matthews India 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 India will offset losses from the drop in Matthews India's long position.| Matthews Asia vs. Matthews Asian Growth | Matthews Asia vs. Matthews Pacific Tiger | Matthews Asia vs. Matthews Asia Growth | Matthews Asia vs. Matthews India Fund |
| Matthews India vs. Matthews China Fund | Matthews India vs. Matthews Pacific Tiger | Matthews India vs. Eaton Vance Greater | Matthews India vs. Morgan Stanley India |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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