Correlation Between Oakmark International and Matthews Asia
Can any of the company-specific risk be diversified away by investing in both Oakmark International 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 Oakmark International and Matthews Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark International Fund and Matthews Asia Dividend, you can compare the effects of market volatilities on Oakmark International 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 Oakmark International with a short position of Matthews Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark International and Matthews Asia.
Diversification Opportunities for Oakmark International and Matthews Asia
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oakmark and Matthews is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International Fund 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 Oakmark International 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 Oakmark International Fund 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 Oakmark International i.e., Oakmark International and Matthews Asia go up and down completely randomly.
Pair Corralation between Oakmark International and Matthews Asia
Assuming the 90 days horizon Oakmark International Fund is expected to generate 1.07 times more return on investment than Matthews Asia. However, Oakmark International is 1.07 times more volatile than Matthews Asia Dividend. It trades about 0.29 of its potential returns per unit of risk. Matthews Asia Dividend is currently generating about 0.0 per unit of risk. If you would invest 2,519 in Oakmark International Fund on November 5, 2024 and sell it today you would earn a total of 133.00 from holding Oakmark International Fund or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark International Fund vs. Matthews Asia Dividend
Performance |
| Timeline |
| Oakmark International |
| Matthews Asia Dividend |
Oakmark International and Matthews Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark International and Matthews Asia
The main advantage of trading using opposite Oakmark International and Matthews Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International 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.| Oakmark International vs. Oakmark Fund Investor | Oakmark International vs. Oakmark Select Fund | Oakmark International vs. Oakmark International Small | Oakmark International vs. Oakmark Global Fund |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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