Correlation Between Matthews Asia and Wasatch Emerging
Can any of the company-specific risk be diversified away by investing in both Matthews Asia and Wasatch 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 Wasatch 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 Wasatch Emerging Markets, you can compare the effects of market volatilities on Matthews Asia and Wasatch 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 Wasatch Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Asia and Wasatch Emerging.
Diversification Opportunities for Matthews Asia and Wasatch Emerging
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Matthews and Wasatch is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Asia Small and Wasatch Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch 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 Wasatch Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Emerging Markets has no effect on the direction of Matthews Asia i.e., Matthews Asia and Wasatch Emerging go up and down completely randomly.
Pair Corralation between Matthews Asia and Wasatch Emerging
Assuming the 90 days horizon Matthews Asia Small is expected to under-perform the Wasatch Emerging. In addition to that, Matthews Asia is 1.02 times more volatile than Wasatch Emerging Markets. It trades about -0.02 of its total potential returns per unit of risk. Wasatch Emerging Markets is currently generating about 0.02 per unit of volatility. If you would invest 298.00 in Wasatch Emerging Markets on September 1, 2024 and sell it today you would earn a total of 7.00 from holding Wasatch Emerging Markets or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews Asia Small vs. Wasatch Emerging Markets
Performance |
| Timeline |
| Matthews Asia Small |
| Wasatch Emerging Markets |
Matthews Asia and Wasatch Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Asia and Wasatch Emerging
The main advantage of trading using opposite Matthews Asia and Wasatch Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Asia position performs unexpectedly, Wasatch 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 Wasatch Emerging will offset losses from the drop in Wasatch 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 |
| Wasatch Emerging vs. Wasatch International Opportunities | Wasatch Emerging vs. Wasatch International Growth | Wasatch Emerging vs. Wasatch Frontier Emerging | Wasatch Emerging vs. Wasatch Micro 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |