Correlation Between Matthews India and Wasatch Emerging
Can any of the company-specific risk be diversified away by investing in both Matthews India and Wasatch 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 India and Wasatch Emerging 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 Wasatch Emerging India, you can compare the effects of market volatilities on Matthews India and Wasatch 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 India with a short position of Wasatch Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews India and Wasatch Emerging.
Diversification Opportunities for Matthews India and Wasatch Emerging
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Matthews and Wasatch is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Matthews India Fund and Wasatch Emerging India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Emerging India 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 Wasatch Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Emerging India has no effect on the direction of Matthews India i.e., Matthews India and Wasatch Emerging go up and down completely randomly.
Pair Corralation between Matthews India and Wasatch Emerging
Assuming the 90 days horizon Matthews India is expected to generate 1.36 times less return on investment than Wasatch Emerging. In addition to that, Matthews India is 1.18 times more volatile than Wasatch Emerging India. It trades about 0.05 of its total potential returns per unit of risk. Wasatch Emerging India is currently generating about 0.08 per unit of volatility. If you would invest 626.00 in Wasatch Emerging India on August 29, 2024 and sell it today you would earn a total of 67.00 from holding Wasatch Emerging India or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews India Fund vs. Wasatch Emerging India
Performance |
| Timeline |
| Matthews India |
| Wasatch Emerging India |
Matthews India and Wasatch Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews India and Wasatch Emerging
The main advantage of trading using opposite Matthews India and Wasatch Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews India position performs unexpectedly, Wasatch 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 Wasatch Emerging will offset losses from the drop in Wasatch Emerging'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 |
| Wasatch Emerging vs. Matthews India Fund | Wasatch Emerging vs. Wasatch Emerging Markets | Wasatch Emerging vs. Wasatch Emerging Markets | Wasatch Emerging vs. iShares MSCI India |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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