Correlation Between Matthews Pacific and Long/short Portfolio
Can any of the company-specific risk be diversified away by investing in both Matthews Pacific and Long/short Portfolio 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 Pacific and Long/short Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews Pacific Tiger and Longshort Portfolio Longshort, you can compare the effects of market volatilities on Matthews Pacific and Long/short Portfolio 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 Pacific with a short position of Long/short Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Pacific and Long/short Portfolio.
Diversification Opportunities for Matthews Pacific and Long/short Portfolio
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Matthews and Long/short is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Pacific Tiger and Longshort Portfolio Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long/short Portfolio and Matthews Pacific 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 Pacific Tiger are associated (or correlated) with Long/short Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long/short Portfolio has no effect on the direction of Matthews Pacific i.e., Matthews Pacific and Long/short Portfolio go up and down completely randomly.
Pair Corralation between Matthews Pacific and Long/short Portfolio
Assuming the 90 days horizon Matthews Pacific is expected to generate 1.42 times less return on investment than Long/short Portfolio. In addition to that, Matthews Pacific is 2.8 times more volatile than Longshort Portfolio Longshort. It trades about 0.03 of its total potential returns per unit of risk. Longshort Portfolio Longshort is currently generating about 0.12 per unit of volatility. If you would invest 1,376 in Longshort Portfolio Longshort on August 29, 2024 and sell it today you would earn a total of 85.00 from holding Longshort Portfolio Longshort or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews Pacific Tiger vs. Longshort Portfolio Longshort
Performance |
| Timeline |
| Matthews Pacific Tiger |
| Long/short Portfolio |
Matthews Pacific and Long/short Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Pacific and Long/short Portfolio
The main advantage of trading using opposite Matthews Pacific and Long/short Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Pacific position performs unexpectedly, Long/short Portfolio 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 Long/short Portfolio will offset losses from the drop in Long/short Portfolio's long position.| Matthews Pacific vs. Matthews Asia Dividend | Matthews Pacific vs. Wcm Focused International | Matthews Pacific vs. Invesco Disciplined Equity | Matthews Pacific vs. Matthews Asian Growth |
| Long/short Portfolio vs. Neuberger Berman Long | Long/short Portfolio vs. Neuberger Berman Long | Long/short Portfolio vs. Pimco Rae Worldwide |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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