Correlation Between Matthews China and Lattice Strategies
Can any of the company-specific risk be diversified away by investing in both Matthews China and Lattice Strategies 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 Lattice Strategies 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 Lattice Strategies Trust, you can compare the effects of market volatilities on Matthews China and Lattice Strategies 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 Lattice Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and Lattice Strategies.
Diversification Opportunities for Matthews China and Lattice Strategies
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Matthews and Lattice is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Discovery and Lattice Strategies Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lattice Strategies Trust 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 Lattice Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lattice Strategies Trust has no effect on the direction of Matthews China i.e., Matthews China and Lattice Strategies go up and down completely randomly.
Pair Corralation between Matthews China and Lattice Strategies
Given the investment horizon of 90 days Matthews China is expected to generate 1.78 times less return on investment than Lattice Strategies. In addition to that, Matthews China is 2.5 times more volatile than Lattice Strategies Trust. It trades about 0.02 of its total potential returns per unit of risk. Lattice Strategies Trust is currently generating about 0.11 per unit of volatility. If you would invest 3,970 in Lattice Strategies Trust on September 3, 2024 and sell it today you would earn a total of 1,900 from holding Lattice Strategies Trust or generate 47.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 45.66% |
| Values | Daily Returns |
Matthews China Discovery vs. Lattice Strategies Trust
Performance |
| Timeline |
| Matthews China Discovery |
| Lattice Strategies Trust |
Matthews China and Lattice Strategies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews China and Lattice Strategies
The main advantage of trading using opposite Matthews China and Lattice Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews China position performs unexpectedly, Lattice Strategies 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 Lattice Strategies will offset losses from the drop in Lattice Strategies' long position.| Matthews China vs. FT Vest Equity | Matthews China vs. Northern Lights | Matthews China vs. Dimensional International High | Matthews China vs. JPMorgan Fundamental Data |
| Lattice Strategies vs. FT Vest Equity | Lattice Strategies vs. Northern Lights | Lattice Strategies vs. Dimensional International High | Lattice Strategies vs. JPMorgan Fundamental Data |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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