Correlation Between Matthews China and Oberweis China
Can any of the company-specific risk be diversified away by investing in both Matthews China and Oberweis China 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 Oberweis China 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 Oberweis China Opportunities, you can compare the effects of market volatilities on Matthews China and Oberweis China 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 Oberweis China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and Oberweis China.
Diversification Opportunities for Matthews China and Oberweis China
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Matthews and Oberweis is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Fund and Oberweis China Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis China Oppor 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 Oberweis China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis China Oppor has no effect on the direction of Matthews China i.e., Matthews China and Oberweis China go up and down completely randomly.
Pair Corralation between Matthews China and Oberweis China
Assuming the 90 days horizon Matthews China Fund is expected to generate 1.4 times more return on investment than Oberweis China. However, Matthews China is 1.4 times more volatile than Oberweis China Opportunities. It trades about 0.05 of its potential returns per unit of risk. Oberweis China Opportunities is currently generating about 0.0 per unit of risk. If you would invest 1,229 in Matthews China Fund on September 1, 2024 and sell it today you would earn a total of 153.00 from holding Matthews China Fund or generate 12.45% 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 Fund vs. Oberweis China Opportunities
Performance |
| Timeline |
| Matthews China |
| Oberweis China Oppor |
Matthews China and Oberweis China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews China and Oberweis China
The main advantage of trading using opposite Matthews China and Oberweis China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews China position performs unexpectedly, Oberweis China 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 Oberweis China will offset losses from the drop in Oberweis China'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 |
| Oberweis China vs. Matthews China Fund | Oberweis China vs. T Rowe Price | Oberweis China vs. Matthews India Fund | Oberweis China vs. Guinness Atkinson China |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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