Correlation Between Matthews China and Janus Henderson
Can any of the company-specific risk be diversified away by investing in both Matthews China and Janus Henderson 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 Janus Henderson 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 Janus Henderson Mid, you can compare the effects of market volatilities on Matthews China and Janus Henderson 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 Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and Janus Henderson.
Diversification Opportunities for Matthews China and Janus Henderson
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Matthews and Janus is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Discovery and Janus Henderson Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Mid 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 Janus Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Henderson Mid has no effect on the direction of Matthews China i.e., Matthews China and Janus Henderson go up and down completely randomly.
Pair Corralation between Matthews China and Janus Henderson
Given the investment horizon of 90 days Matthews China Discovery is expected to under-perform the Janus Henderson. In addition to that, Matthews China is 1.12 times more volatile than Janus Henderson Mid. It trades about -0.33 of its total potential returns per unit of risk. Janus Henderson Mid is currently generating about -0.16 per unit of volatility. If you would invest 2,955 in Janus Henderson Mid on October 9, 2024 and sell it today you would lose (110.00) from holding Janus Henderson Mid or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews China Discovery vs. Janus Henderson Mid
Performance |
| Timeline |
| Matthews China Discovery |
| Janus Henderson Mid |
Matthews China and Janus Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews China and Janus Henderson
The main advantage of trading using opposite Matthews China and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews China position performs unexpectedly, Janus Henderson 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 Janus Henderson will offset losses from the drop in Janus Henderson's long position.| Matthews China vs. JPMorgan Fundamental Data | Matthews China vs. Davis Select International | Matthews China vs. Dimensional ETF Trust | Matthews China vs. Principal Value ETF |
| Janus Henderson vs. JPMorgan Fundamental Data | Janus Henderson vs. Matthews China Discovery | Janus Henderson vs. Davis Select International | Janus Henderson vs. Dimensional ETF Trust |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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