Correlation Between Matthews China and China Region
Can any of the company-specific risk be diversified away by investing in both Matthews China and China Region 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 China Region 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 China Region Fund, you can compare the effects of market volatilities on Matthews China and China Region 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 China Region. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and China Region.
Diversification Opportunities for Matthews China and China Region
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Matthews and China is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Fund and China Region Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Region 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 China Region. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Region has no effect on the direction of Matthews China i.e., Matthews China and China Region go up and down completely randomly.
Pair Corralation between Matthews China and China Region
If you would invest 527.00 in China Region Fund on October 24, 2024 and sell it today you would earn a total of 0.00 from holding China Region Fund or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.56% |
| Values | Daily Returns |
Matthews China Fund vs. China Region Fund
Performance |
| Timeline |
| Matthews China |
| China Region |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Matthews China and China Region Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews China and China Region
The main advantage of trading using opposite Matthews China and China Region positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews China position performs unexpectedly, China Region 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 China Region will offset losses from the drop in China Region'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 |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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