Correlation Between Matthews China and Rbc Bluebay
Can any of the company-specific risk be diversified away by investing in both Matthews China and Rbc Bluebay 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 China and Rbc Bluebay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews China Dividend and Rbc Bluebay Absolute, you can compare the effects of market volatilities on Matthews China and Rbc Bluebay 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 China with a short position of Rbc Bluebay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and Rbc Bluebay.
Diversification Opportunities for Matthews China and Rbc Bluebay
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Matthews and Rbc is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Dividend and Rbc Bluebay Absolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Bluebay Absolute and Matthews China 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 China Dividend are associated (or correlated) with Rbc Bluebay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Bluebay Absolute has no effect on the direction of Matthews China i.e., Matthews China and Rbc Bluebay go up and down completely randomly.
Pair Corralation between Matthews China and Rbc Bluebay
Assuming the 90 days horizon Matthews China Dividend is expected to generate 0.89 times more return on investment than Rbc Bluebay. However, Matthews China Dividend is 1.12 times less risky than Rbc Bluebay. It trades about 0.03 of its potential returns per unit of risk. Rbc Bluebay Absolute is currently generating about 0.02 per unit of risk. If you would invest 1,112 in Matthews China Dividend on September 1, 2024 and sell it today you would earn a total of 64.00 from holding Matthews China Dividend or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews China Dividend vs. Rbc Bluebay Absolute
Performance |
| Timeline |
| Matthews China Dividend |
| Rbc Bluebay Absolute |
Matthews China and Rbc Bluebay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews China and Rbc Bluebay
The main advantage of trading using opposite Matthews China and Rbc Bluebay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews China position performs unexpectedly, Rbc Bluebay 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 Rbc Bluebay will offset losses from the drop in Rbc Bluebay's long position.| Matthews China vs. Matthews China Small | Matthews China vs. Matthews Asia Dividend | Matthews China vs. Matthews Asia Small | Matthews China vs. Matthews Asia Growth |
| Rbc Bluebay vs. Rbc Small Cap | Rbc Bluebay vs. Rbc Enterprise Fund | Rbc Bluebay vs. Rbc Enterprise Fund | Rbc Bluebay vs. Rbc Emerging Markets |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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