Correlation Between Matthews International and Protect Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Matthews International and Protect Pharmaceutical 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 Protect Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews International and Protect Pharmaceutical, you can compare the effects of market volatilities on Matthews International and Protect Pharmaceutical 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 Protect Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews International and Protect Pharmaceutical.
Diversification Opportunities for Matthews International and Protect Pharmaceutical
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Matthews and Protect is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Matthews International and Protect Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protect Pharmaceutical 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 Protect Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protect Pharmaceutical has no effect on the direction of Matthews International i.e., Matthews International and Protect Pharmaceutical go up and down completely randomly.
Pair Corralation between Matthews International and Protect Pharmaceutical
Given the investment horizon of 90 days Matthews International is expected to generate 0.59 times more return on investment than Protect Pharmaceutical. However, Matthews International is 1.71 times less risky than Protect Pharmaceutical. It trades about 0.27 of its potential returns per unit of risk. Protect Pharmaceutical is currently generating about -0.07 per unit of risk. If you would invest 2,329 in Matthews International on September 1, 2024 and sell it today you would earn a total of 687.00 from holding Matthews International or generate 29.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews International vs. Protect Pharmaceutical
Performance |
| Timeline |
| Matthews International |
| Protect Pharmaceutical |
Matthews International and Protect Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews International and Protect Pharmaceutical
The main advantage of trading using opposite Matthews International and Protect Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews International position performs unexpectedly, Protect Pharmaceutical 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 Protect Pharmaceutical will offset losses from the drop in Protect Pharmaceutical'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 |
| Protect Pharmaceutical vs. Brainsway | Protect Pharmaceutical vs. Venus Concept | Protect Pharmaceutical vs. Tactile Systems Technology | Protect Pharmaceutical vs. Icecure Medical |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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