Correlation Between China Region and Matthews China
Can any of the company-specific risk be diversified away by investing in both China Region and Matthews China 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 China 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 China Fund, you can compare the effects of market volatilities on China Region and Matthews China 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 China. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Region and Matthews China.
Diversification Opportunities for China Region and Matthews China
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and MATTHEWS is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding China Region Fund and Matthews China Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews China 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 China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews China has no effect on the direction of China Region i.e., China Region and Matthews China go up and down completely randomly.
Pair Corralation between China Region and Matthews China
If you would invest 527.00 in China Region Fund on August 29, 2024 and sell it today you would earn a total of 0.00 from holding China Region Fund or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
China Region Fund vs. Matthews China Fund
Performance |
| Timeline |
| China Region |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Matthews China |
China Region and Matthews China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Region and Matthews China
The main advantage of trading using opposite China Region and Matthews China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Region position performs unexpectedly, Matthews China 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 China will offset losses from the drop in Matthews China's long position.| China Region vs. The Hartford Municipal | China Region vs. Intermediate Term Tax Free Bond | China Region vs. Nuveen Minnesota Municipal | China Region vs. Counterpoint Tactical Municipal |
| Matthews China vs. Matthews India Fund | Matthews China vs. Matthews Pacific Tiger | Matthews China vs. Matthews Asian Growth | Matthews China vs. Guinness Atkinson China |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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