Correlation Between Matthews Pacific and Matthews Asia
Can any of the company-specific risk be diversified away by investing in both Matthews Pacific and Matthews Asia 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 Matthews Asia 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 Matthews Asia Small, you can compare the effects of market volatilities on Matthews Pacific and Matthews Asia 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 Matthews Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Pacific and Matthews Asia.
Diversification Opportunities for Matthews Pacific and Matthews Asia
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Matthews and Matthews is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Pacific Tiger and Matthews Asia Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Asia Small 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 Matthews Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Asia Small has no effect on the direction of Matthews Pacific i.e., Matthews Pacific and Matthews Asia go up and down completely randomly.
Pair Corralation between Matthews Pacific and Matthews Asia
Assuming the 90 days horizon Matthews Pacific Tiger is expected to generate 0.92 times more return on investment than Matthews Asia. However, Matthews Pacific Tiger is 1.09 times less risky than Matthews Asia. It trades about 0.02 of its potential returns per unit of risk. Matthews Asia Small is currently generating about -0.1 per unit of risk. If you would invest 1,759 in Matthews Pacific Tiger on November 3, 2024 and sell it today you would earn a total of 4.00 from holding Matthews Pacific Tiger or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews Pacific Tiger vs. Matthews Asia Small
Performance |
| Timeline |
| Matthews Pacific Tiger |
| Matthews Asia Small |
Matthews Pacific and Matthews Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Pacific and Matthews Asia
The main advantage of trading using opposite Matthews Pacific and Matthews Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Pacific position performs unexpectedly, Matthews Asia 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 Asia will offset losses from the drop in Matthews Asia'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 |
| Matthews Asia vs. Matthews Asia Dividend | Matthews Asia vs. Matthews Asia Growth | Matthews Asia vs. Matthews Asia Innovators | Matthews Asia vs. Matthews Asian Growth |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |