Correlation Between Matthews Asia and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Matthews Asia and Oakmark International 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 Oakmark International 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 Oakmark International Fund, you can compare the effects of market volatilities on Matthews Asia and Oakmark International 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 Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Asia and Oakmark International.
Diversification Opportunities for Matthews Asia and Oakmark International
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Matthews and Oakmark is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Asia Dividend and Oakmark International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International 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 Oakmark International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark International has no effect on the direction of Matthews Asia i.e., Matthews Asia and Oakmark International go up and down completely randomly.
Pair Corralation between Matthews Asia and Oakmark International
Assuming the 90 days horizon Matthews Asia Dividend is expected to under-perform the Oakmark International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Matthews Asia Dividend is 1.07 times less risky than Oakmark International. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Oakmark International Fund is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,519 in Oakmark International Fund on November 5, 2024 and sell it today you would earn a total of 133.00 from holding Oakmark International Fund or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews Asia Dividend vs. Oakmark International Fund
Performance |
| Timeline |
| Matthews Asia Dividend |
| Oakmark International |
Matthews Asia and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Asia and Oakmark International
The main advantage of trading using opposite Matthews Asia and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Asia position performs unexpectedly, Oakmark International 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 Oakmark International will offset losses from the drop in Oakmark International'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 |
| Oakmark International vs. Oakmark Fund Investor | Oakmark International vs. Oakmark Select Fund | Oakmark International vs. Oakmark International Small | Oakmark International vs. Oakmark Global Fund |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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