Correlation Between China Region and Matthews Korea
Can any of the company-specific risk be diversified away by investing in both China Region and Matthews Korea 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 China Region and Matthews Korea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Region Fund and Matthews Korea Fund, you can compare the effects of market volatilities on China Region and Matthews Korea 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 China Region with a short position of Matthews Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Region and Matthews Korea.
Diversification Opportunities for China Region and Matthews Korea
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Matthews is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding China Region Fund and Matthews Korea Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Korea and China Region 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 China Region Fund are associated (or correlated) with Matthews Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Korea has no effect on the direction of China Region i.e., China Region and Matthews Korea go up and down completely randomly.
Pair Corralation between China Region and Matthews Korea
If you would invest 428.00 in Matthews Korea Fund on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Matthews Korea Fund or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Region Fund vs. Matthews Korea Fund
Performance |
| Timeline |
| China Region |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Matthews Korea |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Region and Matthews Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Region and Matthews Korea
The main advantage of trading using opposite China Region and Matthews Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Region position performs unexpectedly, Matthews Korea 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 Korea will offset losses from the drop in Matthews Korea's long position.| China Region vs. Mesirow Financial Small | China Region vs. Icon Financial Fund | China Region vs. Davis Financial Fund | China Region vs. Transamerica Financial Life |
| Matthews Korea vs. Matthews Japan Fund | Matthews Korea vs. Matthews Pacific Tiger | Matthews Korea vs. Matthews Asia Innovators | Matthews Korea vs. Matthews Asian Growth |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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