Correlation Between Matthews International and Agro Capital
Can any of the company-specific risk be diversified away by investing in both Matthews International and Agro Capital 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 International and Agro Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews International and Agro Capital Management, you can compare the effects of market volatilities on Matthews International and Agro Capital 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 International with a short position of Agro Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews International and Agro Capital.
Diversification Opportunities for Matthews International and Agro Capital
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Matthews and Agro is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Matthews International and Agro Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agro Capital Management and Matthews International 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 International are associated (or correlated) with Agro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agro Capital Management has no effect on the direction of Matthews International i.e., Matthews International and Agro Capital go up and down completely randomly.
Pair Corralation between Matthews International and Agro Capital
Given the investment horizon of 90 days Matthews International is expected to generate 3.07 times less return on investment than Agro Capital. But when comparing it to its historical volatility, Matthews International is 6.39 times less risky than Agro Capital. It trades about 0.28 of its potential returns per unit of risk. Agro Capital Management is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.89 in Agro Capital Management on August 27, 2024 and sell it today you would lose (0.01) from holding Agro Capital Management or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews International vs. Agro Capital Management
Performance |
| Timeline |
| Matthews International |
| Agro Capital Management |
Matthews International and Agro Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews International and Agro Capital
The main advantage of trading using opposite Matthews International and Agro Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews International position performs unexpectedly, Agro Capital 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 Agro Capital will offset losses from the drop in Agro Capital's long position.| Matthews International vs. Steel Partners Holdings | Matthews International vs. Compass Diversified | Matthews International vs. Brookfield Business Partners | Matthews International vs. Tejon Ranch Co |
| Agro Capital vs. Alliance Recovery | Agro Capital vs. Ayala | Agro Capital vs. Alaska Power Telephone | Agro Capital vs. Ayala Corp ADR |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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