Correlation Between Matthews Emerging and SmartETFs Asia
Can any of the company-specific risk be diversified away by investing in both Matthews Emerging and SmartETFs Asia 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 SmartETFs Asia 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 SmartETFs Asia Pacific, you can compare the effects of market volatilities on Matthews Emerging and SmartETFs Asia 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 SmartETFs Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Emerging and SmartETFs Asia.
Diversification Opportunities for Matthews Emerging and SmartETFs Asia
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Matthews and SmartETFs is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Emerging Markets and SmartETFs Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartETFs Asia Pacific 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 SmartETFs Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartETFs Asia Pacific has no effect on the direction of Matthews Emerging i.e., Matthews Emerging and SmartETFs Asia go up and down completely randomly.
Pair Corralation between Matthews Emerging and SmartETFs Asia
Given the investment horizon of 90 days Matthews Emerging is expected to generate 3.08 times less return on investment than SmartETFs Asia. In addition to that, Matthews Emerging is 1.37 times more volatile than SmartETFs Asia Pacific. It trades about 0.05 of its total potential returns per unit of risk. SmartETFs Asia Pacific is currently generating about 0.21 per unit of volatility. If you would invest 1,523 in SmartETFs Asia Pacific on November 2, 2024 and sell it today you would earn a total of 50.00 from holding SmartETFs Asia Pacific or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews Emerging Markets vs. SmartETFs Asia Pacific
Performance |
| Timeline |
| Matthews Emerging Markets |
| SmartETFs Asia Pacific |
Matthews Emerging and SmartETFs Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Emerging and SmartETFs Asia
The main advantage of trading using opposite Matthews Emerging and SmartETFs Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Emerging position performs unexpectedly, SmartETFs Asia 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 SmartETFs Asia will offset losses from the drop in SmartETFs Asia's long position.| Matthews Emerging vs. First Trust RiverFront | Matthews Emerging vs. First Trust RiverFront | Matthews Emerging vs. First Trust Emerging | Matthews Emerging vs. First Trust Emerging |
| SmartETFs Asia vs. SmartETFs Dividend Builder | SmartETFs Asia vs. Anfield Dynamic Fixed | SmartETFs Asia vs. Anfield Universal Fixed | SmartETFs Asia vs. Aptus Drawdown Managed |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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