Correlation Between Matthews Asia and Amg Yacktman
Can any of the company-specific risk be diversified away by investing in both Matthews Asia and Amg Yacktman 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 Amg Yacktman 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 Amg Yacktman Focused, you can compare the effects of market volatilities on Matthews Asia and Amg Yacktman 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 Amg Yacktman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Asia and Amg Yacktman.
Diversification Opportunities for Matthews Asia and Amg Yacktman
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Matthews and Amg is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Asia Dividend and Amg Yacktman Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Yacktman Focused 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 Amg Yacktman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Yacktman Focused has no effect on the direction of Matthews Asia i.e., Matthews Asia and Amg Yacktman go up and down completely randomly.
Pair Corralation between Matthews Asia and Amg Yacktman
Assuming the 90 days horizon Matthews Asia is expected to generate 1.38 times less return on investment than Amg Yacktman. In addition to that, Matthews Asia is 1.08 times more volatile than Amg Yacktman Focused. It trades about 0.04 of its total potential returns per unit of risk. Amg Yacktman Focused is currently generating about 0.06 per unit of volatility. If you would invest 1,731 in Amg Yacktman Focused on September 13, 2024 and sell it today you would earn a total of 384.00 from holding Amg Yacktman Focused or generate 22.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Matthews Asia Dividend vs. Amg Yacktman Focused
Performance |
| Timeline |
| Matthews Asia Dividend |
| Amg Yacktman Focused |
Matthews Asia and Amg Yacktman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Asia and Amg Yacktman
The main advantage of trading using opposite Matthews Asia and Amg Yacktman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Asia position performs unexpectedly, Amg Yacktman 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 Amg Yacktman will offset losses from the drop in Amg Yacktman'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 |
| Amg Yacktman vs. Amg Yacktman Fund | Amg Yacktman vs. Permanent Portfolio Class | Amg Yacktman vs. Oakmark International Fund | Amg Yacktman 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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