Correlation Between Matthews India and Matthews China
Can any of the company-specific risk be diversified away by investing in both Matthews India and Matthews China 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 Matthews China 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 Matthews China Fund, you can compare the effects of market volatilities on Matthews India and Matthews China 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 Matthews China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews India and Matthews China.
Diversification Opportunities for Matthews India and Matthews China
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Matthews and Matthews is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Matthews India Fund and Matthews China Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews China 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 Matthews China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews China has no effect on the direction of Matthews India i.e., Matthews India and Matthews China go up and down completely randomly.
Pair Corralation between Matthews India and Matthews China
Assuming the 90 days horizon Matthews India Fund is expected to generate 0.4 times more return on investment than Matthews China. However, Matthews India Fund is 2.51 times less risky than Matthews China. It trades about 0.05 of its potential returns per unit of risk. Matthews China Fund is currently generating about -0.09 per unit of risk. If you would invest 3,036 in Matthews India Fund on September 1, 2024 and sell it today you would earn a total of 26.00 from holding Matthews India Fund or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Matthews India Fund vs. Matthews China Fund
Performance |
| Timeline |
| Matthews India |
| Matthews China |
Matthews India and Matthews China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews India and Matthews China
The main advantage of trading using opposite Matthews India and Matthews China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews India position performs unexpectedly, Matthews China 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 Matthews China will offset losses from the drop in Matthews China's long position.| Matthews India vs. Alpskotak India Growth | Matthews India vs. Emerald Banking And | Matthews India vs. Oil Gas Ultrasector | Matthews India vs. Matthews Japan Fund |
| Matthews China vs. Matthews Pacific Tiger | Matthews China vs. Matthews India Fund | Matthews China vs. Matthews Asia Growth | Matthews China vs. Matthews China Dividend |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |