Correlation Between Matthews Asia and Emerging Growth
Can any of the company-specific risk be diversified away by investing in both Matthews Asia and Emerging Growth 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 Emerging Growth 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 Emerging Growth Fund, you can compare the effects of market volatilities on Matthews Asia and Emerging Growth 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 Emerging Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Asia and Emerging Growth.
Diversification Opportunities for Matthews Asia and Emerging Growth
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Matthews and Emerging is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Asia Dividend and Emerging Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Growth 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 Emerging Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Growth has no effect on the direction of Matthews Asia i.e., Matthews Asia and Emerging Growth go up and down completely randomly.
Pair Corralation between Matthews Asia and Emerging Growth
Assuming the 90 days horizon Matthews Asia Dividend is expected to under-perform the Emerging Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Matthews Asia Dividend is 1.99 times less risky than Emerging Growth. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Emerging Growth Fund is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,266 in Emerging Growth Fund on September 3, 2024 and sell it today you would earn a total of 147.00 from holding Emerging Growth Fund or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews Asia Dividend vs. Emerging Growth Fund
Performance |
| Timeline |
| Matthews Asia Dividend |
| Emerging Growth |
Matthews Asia and Emerging Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Asia and Emerging Growth
The main advantage of trading using opposite Matthews Asia and Emerging Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Asia position performs unexpectedly, Emerging Growth 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 Emerging Growth will offset losses from the drop in Emerging Growth'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 |
| Emerging Growth vs. The Hartford Midcap | Emerging Growth vs. Mfs Emerging Markets | Emerging Growth vs. Wells Fargo Special | Emerging Growth vs. Washington Mutual Investors |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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