Correlation Between Matthews Emerging and Research Affiliates
Can any of the company-specific risk be diversified away by investing in both Matthews Emerging and Research Affiliates 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 Emerging and Research Affiliates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews Emerging Markets and Research Affiliates Deletions, you can compare the effects of market volatilities on Matthews Emerging and Research Affiliates 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 Emerging with a short position of Research Affiliates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Emerging and Research Affiliates.
Diversification Opportunities for Matthews Emerging and Research Affiliates
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Matthews and Research is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Emerging Markets and Research Affiliates Deletions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Research Affiliates and Matthews Emerging 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 Emerging Markets are associated (or correlated) with Research Affiliates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Research Affiliates has no effect on the direction of Matthews Emerging i.e., Matthews Emerging and Research Affiliates go up and down completely randomly.
Pair Corralation between Matthews Emerging and Research Affiliates
Given the investment horizon of 90 days Matthews Emerging Markets is expected to under-perform the Research Affiliates. But the etf apears to be less risky and, when comparing its historical volatility, Matthews Emerging Markets is 1.46 times less risky than Research Affiliates. The etf trades about -0.18 of its potential returns per unit of risk. The Research Affiliates Deletions is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,594 in Research Affiliates Deletions on August 24, 2024 and sell it today you would earn a total of 88.00 from holding Research Affiliates Deletions or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews Emerging Markets vs. Research Affiliates Deletions
Performance |
| Timeline |
| Matthews Emerging Markets |
| Research Affiliates |
Matthews Emerging and Research Affiliates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Emerging and Research Affiliates
The main advantage of trading using opposite Matthews Emerging and Research Affiliates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Emerging position performs unexpectedly, Research Affiliates 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 Research Affiliates will offset losses from the drop in Research Affiliates' long position.| Matthews Emerging vs. Invesco PureBeta MSCI | Matthews Emerging vs. Aquagold International | Matthews Emerging vs. Morningstar Unconstrained Allocation | Matthews Emerging vs. High Yield Municipal Fund |
| Research Affiliates vs. Vanguard Mid Cap Value | Research Affiliates vs. SPDR SP Dividend | Research Affiliates vs. iShares Russell Mid Cap | Research Affiliates vs. Pacer Cash Cows |
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 Stocks Directory module to find actively traded stocks across global markets.
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