Correlation Between NYSE Composite and Matthews Asia
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Matthews Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Matthews Asia Dividend, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Matthews Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Matthews Asia.
Diversification Opportunities for NYSE Composite and Matthews Asia
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and Matthews is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Matthews Asia Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Asia Dividend and NYSE Composite 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 NYSE Composite 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 Dividend has no effect on the direction of NYSE Composite i.e., NYSE Composite and Matthews Asia go up and down completely randomly.
Pair Corralation between NYSE Composite and Matthews Asia
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.85 times more return on investment than Matthews Asia. However, NYSE Composite is 1.18 times less risky than Matthews Asia. It trades about 0.23 of its potential returns per unit of risk. Matthews Asia Dividend is currently generating about -0.15 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 29, 2024 and sell it today you would earn a total of 66,978 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Matthews Asia Dividend
Performance |
| Timeline |
NYSE Composite and Matthews Asia Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Matthews Asia Dividend
Pair trading matchups for Matthews Asia
Pair Trading with NYSE Composite and Matthews Asia
The main advantage of trading using opposite NYSE Composite and Matthews Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Matthews Asia vs. Matthews Asian Growth | Matthews Asia vs. Matthews Pacific Tiger | Matthews Asia vs. Matthews Asia Growth | Matthews Asia vs. Matthews India Fund |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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