Correlation Between Matthews Japan and Lazard Emerging
Can any of the company-specific risk be diversified away by investing in both Matthews Japan and Lazard Emerging 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 Japan and Lazard Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews Japan Fund and Lazard Emerging Markets, you can compare the effects of market volatilities on Matthews Japan and Lazard Emerging 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 Japan with a short position of Lazard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Japan and Lazard Emerging.
Diversification Opportunities for Matthews Japan and Lazard Emerging
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Matthews and Lazard is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Japan Fund and Lazard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Emerging Markets and Matthews Japan 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 Japan Fund are associated (or correlated) with Lazard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Emerging Markets has no effect on the direction of Matthews Japan i.e., Matthews Japan and Lazard Emerging go up and down completely randomly.
Pair Corralation between Matthews Japan and Lazard Emerging
Assuming the 90 days horizon Matthews Japan Fund is expected to generate 1.75 times more return on investment than Lazard Emerging. However, Matthews Japan is 1.75 times more volatile than Lazard Emerging Markets. It trades about 0.05 of its potential returns per unit of risk. Lazard Emerging Markets is currently generating about 0.01 per unit of risk. If you would invest 2,092 in Matthews Japan Fund on September 12, 2024 and sell it today you would earn a total of 22.00 from holding Matthews Japan Fund or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews Japan Fund vs. Lazard Emerging Markets
Performance |
| Timeline |
| Matthews Japan |
| Lazard Emerging Markets |
Matthews Japan and Lazard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Japan and Lazard Emerging
The main advantage of trading using opposite Matthews Japan and Lazard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Japan position performs unexpectedly, Lazard Emerging 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 Lazard Emerging will offset losses from the drop in Lazard Emerging's long position.| Matthews Japan vs. Hennessy Japan Fund | Matthews Japan vs. Matthews India Fund | Matthews Japan vs. Hennessy Japan Fund | Matthews Japan vs. Matthews Asia Dividend |
| Lazard Emerging vs. Matthews Japan Fund | Lazard Emerging vs. Hennessy Japan Fund | Lazard Emerging vs. Basic Materials Fund | Lazard Emerging vs. Basic Materials Fund |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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