Correlation Between Matthews Asia and Matthews International
Can any of the company-specific risk be diversified away by investing in both Matthews Asia and Matthews International 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 Asia and Matthews International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews Asia Innovators and Matthews International Funds, you can compare the effects of market volatilities on Matthews Asia and Matthews International 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 Asia with a short position of Matthews International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Asia and Matthews International.
Diversification Opportunities for Matthews Asia and Matthews International
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Matthews and Matthews is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Asia Innovators and Matthews International Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International and Matthews Asia 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 Asia Innovators are associated (or correlated) with Matthews International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews International has no effect on the direction of Matthews Asia i.e., Matthews Asia and Matthews International go up and down completely randomly.
Pair Corralation between Matthews Asia and Matthews International
Given the investment horizon of 90 days Matthews Asia Innovators is expected to generate 1.12 times more return on investment than Matthews International. However, Matthews Asia is 1.12 times more volatile than Matthews International Funds. It trades about 0.03 of its potential returns per unit of risk. Matthews International Funds is currently generating about -0.09 per unit of risk. If you would invest 2,809 in Matthews Asia Innovators on September 1, 2024 and sell it today you would earn a total of 17.00 from holding Matthews Asia Innovators or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews Asia Innovators vs. Matthews International Funds
Performance |
| Timeline |
| Matthews Asia Innovators |
| Matthews International |
Matthews Asia and Matthews International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Asia and Matthews International
The main advantage of trading using opposite Matthews Asia and Matthews International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Asia position performs unexpectedly, Matthews International 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 International will offset losses from the drop in Matthews International's long position.| Matthews Asia vs. Matthews China Active | Matthews Asia vs. MAYBANK EMERGING ETF | Matthews Asia vs. Matthews Emerging Markets | Matthews Asia vs. JP Morgan Exchange Traded |
| Matthews International vs. iShares MSCI Emerging | Matthews International vs. Global X Funds | Matthews International vs. Franklin FTSE Asia | Matthews International vs. Franklin FTSE Europe |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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