Correlation Between NYSE Composite and Matthews International
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Matthews International 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 International 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 International, you can compare the effects of market volatilities on NYSE Composite and Matthews International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Matthews International.
Diversification Opportunities for NYSE Composite and Matthews International
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Matthews is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Matthews International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews International has no effect on the direction of NYSE Composite i.e., NYSE Composite and Matthews International go up and down completely randomly.
Pair Corralation between NYSE Composite and Matthews International
Assuming the 90 days trading horizon NYSE Composite is expected to generate 7.41 times less return on investment than Matthews International. But when comparing it to its historical volatility, NYSE Composite is 3.31 times less risky than Matthews International. It trades about 0.13 of its potential returns per unit of risk. Matthews International is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,220 in Matthews International on August 24, 2024 and sell it today you would earn a total of 329.00 from holding Matthews International or generate 14.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Matthews International
Performance |
| Timeline |
NYSE Composite and Matthews International Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Matthews International
Pair trading matchups for Matthews International
Pair Trading with NYSE Composite and Matthews International
The main advantage of trading using opposite NYSE Composite and Matthews International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Matthews International 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 International will offset losses from the drop in Matthews International's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Matthews International vs. Steel Partners Holdings | Matthews International vs. Compass Diversified | Matthews International vs. Brookfield Business Partners | Matthews International vs. Tejon Ranch Co |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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