Correlation Between Matthews China and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both Matthews China and Tidal Trust 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 Tidal Trust 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 Tidal Trust III, you can compare the effects of market volatilities on Matthews China and Tidal Trust 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 Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and Tidal Trust.
Diversification Opportunities for Matthews China and Tidal Trust
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Matthews and Tidal is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Discovery and Tidal Trust III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust III 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 Tidal Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Trust III has no effect on the direction of Matthews China i.e., Matthews China and Tidal Trust go up and down completely randomly.
Pair Corralation between Matthews China and Tidal Trust
Given the investment horizon of 90 days Matthews China Discovery is expected to under-perform the Tidal Trust. In addition to that, Matthews China is 3.24 times more volatile than Tidal Trust III. It trades about -0.03 of its total potential returns per unit of risk. Tidal Trust III is currently generating about 0.2 per unit of volatility. If you would invest 2,473 in Tidal Trust III on September 2, 2024 and sell it today you would earn a total of 62.00 from holding Tidal Trust III or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews China Discovery vs. Tidal Trust III
Performance |
| Timeline |
| Matthews China Discovery |
| Tidal Trust III |
Matthews China and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews China and Tidal Trust
The main advantage of trading using opposite Matthews China and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews China position performs unexpectedly, Tidal Trust 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 Tidal Trust will offset losses from the drop in Tidal Trust's long position.| Matthews China vs. FT Vest Equity | Matthews China vs. Northern Lights | Matthews China vs. Dimensional International High | Matthews China vs. Davis Select International |
| Tidal Trust vs. FT Vest Equity | Tidal Trust vs. Northern Lights | Tidal Trust vs. Dimensional International High | Tidal Trust vs. Matthews China Discovery |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |