Correlation Between Matthews International and Tejon Ranch
Can any of the company-specific risk be diversified away by investing in both Matthews International and Tejon Ranch 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 Tejon Ranch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews International and Tejon Ranch Co, you can compare the effects of market volatilities on Matthews International and Tejon Ranch 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 Tejon Ranch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews International and Tejon Ranch.
Diversification Opportunities for Matthews International and Tejon Ranch
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Matthews and Tejon is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Matthews International and Tejon Ranch Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tejon Ranch 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 Tejon Ranch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tejon Ranch has no effect on the direction of Matthews International i.e., Matthews International and Tejon Ranch go up and down completely randomly.
Pair Corralation between Matthews International and Tejon Ranch
Given the investment horizon of 90 days Matthews International is expected to generate 1.39 times more return on investment than Tejon Ranch. However, Matthews International is 1.39 times more volatile than Tejon Ranch Co. It trades about 0.01 of its potential returns per unit of risk. Tejon Ranch Co is currently generating about -0.01 per unit of risk. If you would invest 3,043 in Matthews International on August 28, 2024 and sell it today you would earn a total of 111.00 from holding Matthews International or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews International vs. Tejon Ranch Co
Performance |
| Timeline |
| Matthews International |
| Tejon Ranch |
Matthews International and Tejon Ranch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews International and Tejon Ranch
The main advantage of trading using opposite Matthews International and Tejon Ranch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews International position performs unexpectedly, Tejon Ranch 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 Tejon Ranch will offset losses from the drop in Tejon Ranch'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 |
| Tejon Ranch vs. Steel Partners Holdings | Tejon Ranch vs. Compass Diversified | Tejon Ranch vs. Brookfield Business Partners | Tejon Ranch vs. Matthews International |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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