Correlation Between Matthews China and Baron Global
Can any of the company-specific risk be diversified away by investing in both Matthews China and Baron Global 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 Baron Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews China Fund and Baron Global Advantage, you can compare the effects of market volatilities on Matthews China and Baron Global 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 Baron Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and Baron Global.
Diversification Opportunities for Matthews China and Baron Global
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MATTHEWS and Baron is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Fund and Baron Global Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Global Advantage 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 Fund are associated (or correlated) with Baron Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Global Advantage has no effect on the direction of Matthews China i.e., Matthews China and Baron Global go up and down completely randomly.
Pair Corralation between Matthews China and Baron Global
Assuming the 90 days horizon Matthews China is expected to generate 1.54 times less return on investment than Baron Global. In addition to that, Matthews China is 1.86 times more volatile than Baron Global Advantage. It trades about 0.05 of its total potential returns per unit of risk. Baron Global Advantage is currently generating about 0.15 per unit of volatility. If you would invest 3,072 in Baron Global Advantage on August 29, 2024 and sell it today you would earn a total of 809.00 from holding Baron Global Advantage or generate 26.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews China Fund vs. Baron Global Advantage
Performance |
| Timeline |
| Matthews China |
| Baron Global Advantage |
Matthews China and Baron Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews China and Baron Global
The main advantage of trading using opposite Matthews China and Baron Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews China position performs unexpectedly, Baron Global 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 Baron Global will offset losses from the drop in Baron Global's long position.| Matthews China vs. Matthews India Fund | Matthews China vs. Matthews Pacific Tiger | Matthews China vs. Matthews Asian Growth | Matthews China vs. Guinness Atkinson China |
| Baron Global vs. Baron Opportunity Fund | Baron Global vs. Morgan Stanley Multi | Baron Global vs. Baron Focused Growth | Baron Global vs. Mid Cap Growth |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |