Correlation Between Matthews China and Touchstone Dynamic
Can any of the company-specific risk be diversified away by investing in both Matthews China and Touchstone Dynamic 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 Touchstone Dynamic 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 Touchstone Dynamic International, you can compare the effects of market volatilities on Matthews China and Touchstone Dynamic 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 Touchstone Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and Touchstone Dynamic.
Diversification Opportunities for Matthews China and Touchstone Dynamic
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Matthews and Touchstone is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Discovery and Touchstone Dynamic Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Dynamic 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 Touchstone Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Dynamic has no effect on the direction of Matthews China i.e., Matthews China and Touchstone Dynamic go up and down completely randomly.
Pair Corralation between Matthews China and Touchstone Dynamic
Given the investment horizon of 90 days Matthews China is expected to generate 1.31 times less return on investment than Touchstone Dynamic. In addition to that, Matthews China is 2.14 times more volatile than Touchstone Dynamic International. It trades about 0.02 of its total potential returns per unit of risk. Touchstone Dynamic International is currently generating about 0.07 per unit of volatility. If you would invest 2,571 in Touchstone Dynamic International on September 3, 2024 and sell it today you would earn a total of 376.00 from holding Touchstone Dynamic International or generate 14.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.87% |
| Values | Daily Returns |
Matthews China Discovery vs. Touchstone Dynamic Internation
Performance |
| Timeline |
| Matthews China Discovery |
| Touchstone Dynamic |
Matthews China and Touchstone Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews China and Touchstone Dynamic
The main advantage of trading using opposite Matthews China and Touchstone Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews China position performs unexpectedly, Touchstone Dynamic 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 Touchstone Dynamic will offset losses from the drop in Touchstone Dynamic's 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 |
| Touchstone Dynamic vs. FT Vest Equity | Touchstone Dynamic vs. Northern Lights | Touchstone Dynamic vs. Dimensional International High | Touchstone Dynamic 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |