Correlation Between Matthews India and Fidelity Japan
Can any of the company-specific risk be diversified away by investing in both Matthews India and Fidelity Japan 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 India and Fidelity Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews India Fund and Fidelity Japan Smaller, you can compare the effects of market volatilities on Matthews India and Fidelity Japan 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 India with a short position of Fidelity Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews India and Fidelity Japan.
Diversification Opportunities for Matthews India and Fidelity Japan
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Matthews and Fidelity is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Matthews India Fund and Fidelity Japan Smaller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Japan Smaller and Matthews India 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 India Fund are associated (or correlated) with Fidelity Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Japan Smaller has no effect on the direction of Matthews India i.e., Matthews India and Fidelity Japan go up and down completely randomly.
Pair Corralation between Matthews India and Fidelity Japan
Assuming the 90 days horizon Matthews India Fund is expected to generate 0.74 times more return on investment than Fidelity Japan. However, Matthews India Fund is 1.34 times less risky than Fidelity Japan. It trades about 0.27 of its potential returns per unit of risk. Fidelity Japan Smaller is currently generating about 0.11 per unit of risk. If you would invest 3,000 in Matthews India Fund on September 13, 2024 and sell it today you would earn a total of 123.00 from holding Matthews India Fund or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews India Fund vs. Fidelity Japan Smaller
Performance |
| Timeline |
| Matthews India |
| Fidelity Japan Smaller |
Matthews India and Fidelity Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews India and Fidelity Japan
The main advantage of trading using opposite Matthews India and Fidelity Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews India position performs unexpectedly, Fidelity Japan 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 Fidelity Japan will offset losses from the drop in Fidelity Japan's long position.| Matthews India vs. Matthews China Fund | Matthews India vs. Matthews Pacific Tiger | Matthews India vs. Eaton Vance Greater | Matthews India vs. Morgan Stanley India |
| Fidelity Japan vs. Fidelity Freedom 2015 | Fidelity Japan vs. Fidelity Puritan Fund | Fidelity Japan vs. Fidelity Puritan Fund | Fidelity Japan vs. Fidelity Pennsylvania Municipal |
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.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |