Correlation Between Matthews China and Cambria Micro
Can any of the company-specific risk be diversified away by investing in both Matthews China and Cambria Micro 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 Cambria Micro 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 Cambria Micro And, you can compare the effects of market volatilities on Matthews China and Cambria Micro 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 Cambria Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and Cambria Micro.
Diversification Opportunities for Matthews China and Cambria Micro
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Matthews and Cambria is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Discovery and Cambria Micro And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Micro And 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 Cambria Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Micro And has no effect on the direction of Matthews China i.e., Matthews China and Cambria Micro go up and down completely randomly.
Pair Corralation between Matthews China and Cambria Micro
Given the investment horizon of 90 days Matthews China Discovery is expected to under-perform the Cambria Micro. In addition to that, Matthews China is 1.14 times more volatile than Cambria Micro And. It trades about -0.06 of its total potential returns per unit of risk. Cambria Micro And is currently generating about 0.17 per unit of volatility. If you would invest 2,608 in Cambria Micro And on August 24, 2024 and sell it today you would earn a total of 157.00 from holding Cambria Micro And or generate 6.02% 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. Cambria Micro And
Performance |
| Timeline |
| Matthews China Discovery |
| Cambria Micro And |
Matthews China and Cambria Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews China and Cambria Micro
The main advantage of trading using opposite Matthews China and Cambria Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews China position performs unexpectedly, Cambria Micro 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 Cambria Micro will offset losses from the drop in Cambria Micro'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 |
| Cambria Micro vs. Invesco SP SmallCap | Cambria Micro vs. Invesco SP MidCap | Cambria Micro vs. Invesco SP SmallCap | Cambria Micro vs. Invesco SP MidCap |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |