Correlation Between Research Affiliates and Matthews China
Can any of the company-specific risk be diversified away by investing in both Research Affiliates and Matthews China 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 Research Affiliates and Matthews China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Research Affiliates Deletions and Matthews China Discovery, you can compare the effects of market volatilities on Research Affiliates and Matthews China 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 Research Affiliates with a short position of Matthews China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Research Affiliates and Matthews China.
Diversification Opportunities for Research Affiliates and Matthews China
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Research and Matthews is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Research Affiliates Deletions and Matthews China Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews China Discovery and Research Affiliates 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 Research Affiliates Deletions are associated (or correlated) with Matthews China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews China Discovery has no effect on the direction of Research Affiliates i.e., Research Affiliates and Matthews China go up and down completely randomly.
Pair Corralation between Research Affiliates and Matthews China
Given the investment horizon of 90 days Research Affiliates Deletions is expected to generate 0.72 times more return on investment than Matthews China. However, Research Affiliates Deletions is 1.39 times less risky than Matthews China. It trades about 0.12 of its potential returns per unit of risk. Matthews China Discovery is currently generating about -0.06 per unit of risk. If you would invest 2,594 in Research Affiliates Deletions on August 24, 2024 and sell it today you would earn a total of 88.00 from holding Research Affiliates Deletions or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Research Affiliates Deletions vs. Matthews China Discovery
Performance |
| Timeline |
| Research Affiliates |
| Matthews China Discovery |
Research Affiliates and Matthews China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Research Affiliates and Matthews China
The main advantage of trading using opposite Research Affiliates and Matthews China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Research Affiliates position performs unexpectedly, Matthews China 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 China will offset losses from the drop in Matthews China's long position.| Research Affiliates vs. Vanguard Mid Cap Value | Research Affiliates vs. SPDR SP Dividend | Research Affiliates vs. iShares Russell Mid Cap | Research Affiliates vs. Pacer Cash Cows |
| Matthews China vs. Matthews Emerging Markets | Matthews China vs. Neuberger Berman ETF | Matthews China vs. Fidelity Small Mid Cap | Matthews China vs. Professionally Managed Portfolios |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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