Correlation Between Matthews China and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Matthews China and Eaton Vance 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 Eaton Vance 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 Eaton Vance Greater, you can compare the effects of market volatilities on Matthews China and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and Eaton Vance.
Diversification Opportunities for Matthews China and Eaton Vance
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Matthews and Eaton is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Fund and Eaton Vance Greater in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Greater 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Greater has no effect on the direction of Matthews China i.e., Matthews China and Eaton Vance go up and down completely randomly.
Pair Corralation between Matthews China and Eaton Vance
Assuming the 90 days horizon Matthews China Fund is expected to under-perform the Eaton Vance. In addition to that, Matthews China is 1.28 times more volatile than Eaton Vance Greater. It trades about -0.09 of its total potential returns per unit of risk. Eaton Vance Greater is currently generating about -0.09 per unit of volatility. If you would invest 1,459 in Eaton Vance Greater on September 1, 2024 and sell it today you would lose (54.00) from holding Eaton Vance Greater or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews China Fund vs. Eaton Vance Greater
Performance |
| Timeline |
| Matthews China |
| Eaton Vance Greater |
Matthews China and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews China and Eaton Vance
The main advantage of trading using opposite Matthews China and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews China position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance'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 |
| Eaton Vance vs. Columbia Greater China | Eaton Vance vs. Guinness Atkinson China | Eaton Vance vs. Eaton Vance Greater | Eaton Vance vs. Aquagold 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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