Correlation Between Matthews China and Artisan Developing
Can any of the company-specific risk be diversified away by investing in both Matthews China and Artisan Developing 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 Artisan Developing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews China Small and Artisan Developing World, you can compare the effects of market volatilities on Matthews China and Artisan Developing 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 Artisan Developing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and Artisan Developing.
Diversification Opportunities for Matthews China and Artisan Developing
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Matthews and Artisan is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Small and Artisan Developing World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Developing World 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 Small are associated (or correlated) with Artisan Developing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Developing World has no effect on the direction of Matthews China i.e., Matthews China and Artisan Developing go up and down completely randomly.
Pair Corralation between Matthews China and Artisan Developing
Assuming the 90 days horizon Matthews China is expected to generate 1.63 times less return on investment than Artisan Developing. But when comparing it to its historical volatility, Matthews China Small is 1.1 times less risky than Artisan Developing. It trades about 0.15 of its potential returns per unit of risk. Artisan Developing World is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,150 in Artisan Developing World on November 1, 2024 and sell it today you would earn a total of 118.00 from holding Artisan Developing World or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews China Small vs. Artisan Developing World
Performance |
| Timeline |
| Matthews China Small |
| Artisan Developing World |
Matthews China and Artisan Developing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews China and Artisan Developing
The main advantage of trading using opposite Matthews China and Artisan Developing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews China position performs unexpectedly, Artisan Developing 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 Artisan Developing will offset losses from the drop in Artisan Developing's long position.| Matthews China vs. Matthews China Dividend | Matthews China vs. Matthews Asia Innovators | Matthews China vs. Matthews Asia Small | Matthews China vs. Matthews China Fund |
| Artisan Developing vs. American Beacon Bridgeway | Artisan Developing vs. Baron Global Advantage | Artisan Developing vs. Matthews China Small | Artisan Developing vs. Artisan High Income |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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