Correlation Between Matthews Asia and Driehaus Emerging
Can any of the company-specific risk be diversified away by investing in both Matthews Asia and Driehaus Emerging 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 Driehaus Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews Asia Small and Driehaus Emerging Markets, you can compare the effects of market volatilities on Matthews Asia and Driehaus Emerging 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 Driehaus Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Asia and Driehaus Emerging.
Diversification Opportunities for Matthews Asia and Driehaus Emerging
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Matthews and Driehaus is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Asia Small and Driehaus Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Driehaus Emerging Markets 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 Small are associated (or correlated) with Driehaus Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Driehaus Emerging Markets has no effect on the direction of Matthews Asia i.e., Matthews Asia and Driehaus Emerging go up and down completely randomly.
Pair Corralation between Matthews Asia and Driehaus Emerging
Assuming the 90 days horizon Matthews Asia Small is expected to under-perform the Driehaus Emerging. In addition to that, Matthews Asia is 1.07 times more volatile than Driehaus Emerging Markets. It trades about -0.02 of its total potential returns per unit of risk. Driehaus Emerging Markets is currently generating about 0.03 per unit of volatility. If you would invest 2,151 in Driehaus Emerging Markets on September 1, 2024 and sell it today you would earn a total of 53.00 from holding Driehaus Emerging Markets or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews Asia Small vs. Driehaus Emerging Markets
Performance |
| Timeline |
| Matthews Asia Small |
| Driehaus Emerging Markets |
Matthews Asia and Driehaus Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Asia and Driehaus Emerging
The main advantage of trading using opposite Matthews Asia and Driehaus Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Asia position performs unexpectedly, Driehaus Emerging 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 Driehaus Emerging will offset losses from the drop in Driehaus Emerging's long position.| Matthews Asia vs. Matthews Asia Dividend | Matthews Asia vs. Matthews Asia Growth | Matthews Asia vs. Matthews Asia Innovators | Matthews Asia vs. Matthews Asian Growth |
| Driehaus Emerging vs. Driehaus Emerging Markets | Driehaus Emerging vs. Driehaus Multi Asset Growth | Driehaus Emerging vs. Driehaus Micro Cap | Driehaus Emerging vs. Driehaus Small Cap |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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