Correlation Between Matthews China and WBI BullBear
Can any of the company-specific risk be diversified away by investing in both Matthews China and WBI BullBear 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 WBI BullBear 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 WBI BullBear Quality, you can compare the effects of market volatilities on Matthews China and WBI BullBear 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 WBI BullBear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and WBI BullBear.
Diversification Opportunities for Matthews China and WBI BullBear
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Matthews and WBI is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Discovery and WBI BullBear Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WBI BullBear Quality 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 WBI BullBear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WBI BullBear Quality has no effect on the direction of Matthews China i.e., Matthews China and WBI BullBear go up and down completely randomly.
Pair Corralation between Matthews China and WBI BullBear
Given the investment horizon of 90 days Matthews China Discovery is expected to under-perform the WBI BullBear. In addition to that, Matthews China is 2.57 times more volatile than WBI BullBear Quality. It trades about -0.07 of its total potential returns per unit of risk. WBI BullBear Quality is currently generating about 0.44 per unit of volatility. If you would invest 3,470 in WBI BullBear Quality on September 3, 2024 and sell it today you would earn a total of 237.00 from holding WBI BullBear Quality or generate 6.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews China Discovery vs. WBI BullBear Quality
Performance |
| Timeline |
| Matthews China Discovery |
| WBI BullBear Quality |
Matthews China and WBI BullBear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews China and WBI BullBear
The main advantage of trading using opposite Matthews China and WBI BullBear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews China position performs unexpectedly, WBI BullBear 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 WBI BullBear will offset losses from the drop in WBI BullBear'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 |
| WBI BullBear vs. FT Vest Equity | WBI BullBear vs. Northern Lights | WBI BullBear vs. Dimensional International High | WBI BullBear 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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