Correlation Between Matthews International and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Matthews International and IShares MSCI 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 International and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews International Funds and iShares MSCI Hong, you can compare the effects of market volatilities on Matthews International and IShares MSCI 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 International with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews International and IShares MSCI.
Diversification Opportunities for Matthews International and IShares MSCI
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Matthews and IShares is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Matthews International Funds and iShares MSCI Hong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Hong and Matthews International 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 International Funds are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Hong has no effect on the direction of Matthews International i.e., Matthews International and IShares MSCI go up and down completely randomly.
Pair Corralation between Matthews International and IShares MSCI
Given the investment horizon of 90 days Matthews International Funds is expected to under-perform the IShares MSCI. But the etf apears to be less risky and, when comparing its historical volatility, Matthews International Funds is 1.15 times less risky than IShares MSCI. The etf trades about -0.02 of its potential returns per unit of risk. The iShares MSCI Hong is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,952 in iShares MSCI Hong on September 12, 2024 and sell it today you would lose (195.00) from holding iShares MSCI Hong or give up 9.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 72.32% |
| Values | Daily Returns |
Matthews International Funds vs. iShares MSCI Hong
Performance |
| Timeline |
| Matthews International |
| iShares MSCI Hong |
Matthews International and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews International and IShares MSCI
The main advantage of trading using opposite Matthews International and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews International position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| Matthews International vs. iShares MSCI Qatar | Matthews International vs. iShares MSCI Israel | Matthews International vs. iShares MSCI Philippines |
| IShares MSCI vs. KraneShares CSI China | IShares MSCI vs. Invesco China Technology | IShares MSCI vs. iShares MSCI India | IShares MSCI vs. Xtrackers Harvest CSI |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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