Correlation Between Matthews China and Alpha Blue
Can any of the company-specific risk be diversified away by investing in both Matthews China and Alpha Blue 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 Alpha Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews China Discovery and Alpha Blue Capital, you can compare the effects of market volatilities on Matthews China and Alpha Blue 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 Alpha Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and Alpha Blue.
Diversification Opportunities for Matthews China and Alpha Blue
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Matthews and Alpha is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Discovery and Alpha Blue Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Blue Capital 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 Discovery are associated (or correlated) with Alpha Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Blue Capital has no effect on the direction of Matthews China i.e., Matthews China and Alpha Blue go up and down completely randomly.
Pair Corralation between Matthews China and Alpha Blue
Given the investment horizon of 90 days Matthews China Discovery is expected to under-perform the Alpha Blue. In addition to that, Matthews China is 1.82 times more volatile than Alpha Blue Capital. It trades about -0.06 of its total potential returns per unit of risk. Alpha Blue Capital is currently generating about 0.25 per unit of volatility. If you would invest 2,834 in Alpha Blue Capital on August 24, 2024 and sell it today you would earn a total of 160.00 from holding Alpha Blue Capital or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews China Discovery vs. Alpha Blue Capital
Performance |
| Timeline |
| Matthews China Discovery |
| Alpha Blue Capital |
Matthews China and Alpha Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews China and Alpha Blue
The main advantage of trading using opposite Matthews China and Alpha Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews China position performs unexpectedly, Alpha Blue 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 Alpha Blue will offset losses from the drop in Alpha Blue's long position.| Matthews China vs. Matthews Emerging Markets | Matthews China vs. Neuberger Berman ETF | Matthews China vs. Fidelity Small Mid Cap | Matthews China vs. Professionally Managed Portfolios |
| Alpha Blue vs. Matthews China Discovery | Alpha Blue vs. Matthews Emerging Markets | Alpha Blue vs. Neuberger Berman ETF | Alpha Blue vs. Fidelity Small Mid Cap |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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