Correlation Between NYSE Composite and Matthews Japan
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Matthews Japan 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 Japan 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 Japan Fund, you can compare the effects of market volatilities on NYSE Composite and Matthews Japan 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 Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Matthews Japan.
Diversification Opportunities for NYSE Composite and Matthews Japan
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Matthews is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Matthews Japan Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Japan 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 Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Japan has no effect on the direction of NYSE Composite i.e., NYSE Composite and Matthews Japan go up and down completely randomly.
Pair Corralation between NYSE Composite and Matthews Japan
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.49 times more return on investment than Matthews Japan. However, NYSE Composite is 2.06 times less risky than Matthews Japan. It trades about 0.11 of its potential returns per unit of risk. Matthews Japan Fund is currently generating about 0.03 per unit of risk. If you would invest 1,766,949 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 260,255 from holding NYSE Composite or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
NYSE Composite vs. Matthews Japan Fund
Performance |
| Timeline |
NYSE Composite and Matthews Japan Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Matthews Japan Fund
Pair trading matchups for Matthews Japan
Pair Trading with NYSE Composite and Matthews Japan
The main advantage of trading using opposite NYSE Composite and Matthews Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Matthews Japan 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 Japan will offset losses from the drop in Matthews Japan's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Matthews Japan vs. Hennessy Japan Fund | Matthews Japan vs. Matthews India Fund | Matthews Japan vs. Hennessy Japan Fund | Matthews Japan vs. Matthews Asia Dividend |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Commodity Directory Find actively traded commodities issued by global exchanges |