Correlation Between Matthews Asia and Matthews Japan
Can any of the company-specific risk be diversified away by investing in both Matthews Asia and Matthews 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 Asia and Matthews Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews Asia Dividend and Matthews Japan Fund, you can compare the effects of market volatilities on Matthews Asia and Matthews 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 Asia with a short position of Matthews Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Asia and Matthews Japan.
Diversification Opportunities for Matthews Asia and Matthews Japan
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Matthews and Matthews is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Asia Dividend and Matthews Japan Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Japan 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 Dividend are associated (or correlated) with Matthews Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Japan has no effect on the direction of Matthews Asia i.e., Matthews Asia and Matthews Japan go up and down completely randomly.
Pair Corralation between Matthews Asia and Matthews Japan
Assuming the 90 days horizon Matthews Asia Dividend is expected to under-perform the Matthews Japan. In addition to that, Matthews Asia is 1.06 times more volatile than Matthews Japan Fund. It trades about -0.14 of its total potential returns per unit of risk. Matthews Japan Fund is currently generating about -0.01 per unit of volatility. If you would invest 2,047 in Matthews Japan Fund on August 30, 2024 and sell it today you would lose (5.00) from holding Matthews Japan Fund or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Matthews Asia Dividend vs. Matthews Japan Fund
Performance |
| Timeline |
| Matthews Asia Dividend |
| Matthews Japan |
Matthews Asia and Matthews Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Asia and Matthews Japan
The main advantage of trading using opposite Matthews Asia and Matthews Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Asia position performs unexpectedly, Matthews 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 Matthews Japan will offset losses from the drop in Matthews Japan's long position.| Matthews Asia vs. Matthews Pacific Tiger | Matthews Asia vs. Sit Dividend Growth | Matthews Asia vs. Harbor Vertible Securities | Matthews Asia vs. Jpmorgan Unconstrained Debt |
| Matthews Japan vs. Hennessy Japan Fund | Matthews Japan vs. Matthews India Fund | Matthews Japan vs. Hennessy Japan Fund | Matthews Japan vs. Matthews Asia 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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