Correlation Between Vanguard Emerging and Matthews Asian
Can any of the company-specific risk be diversified away by investing in both Vanguard Emerging and Matthews Asian 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 Vanguard Emerging and Matthews Asian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Emerging Markets and Matthews Asian Growth, you can compare the effects of market volatilities on Vanguard Emerging and Matthews Asian 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 Vanguard Emerging with a short position of Matthews Asian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Matthews Asian.
Diversification Opportunities for Vanguard Emerging and Matthews Asian
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VANGUARD and Matthews is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets and Matthews Asian Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Asian Growth and Vanguard Emerging 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 Vanguard Emerging Markets are associated (or correlated) with Matthews Asian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Asian Growth has no effect on the direction of Vanguard Emerging i.e., Vanguard Emerging and Matthews Asian go up and down completely randomly.
Pair Corralation between Vanguard Emerging and Matthews Asian
Assuming the 90 days horizon Vanguard Emerging Markets is expected to generate 1.05 times more return on investment than Matthews Asian. However, Vanguard Emerging is 1.05 times more volatile than Matthews Asian Growth. It trades about 0.05 of its potential returns per unit of risk. Matthews Asian Growth is currently generating about 0.03 per unit of risk. If you would invest 2,411 in Vanguard Emerging Markets on August 30, 2024 and sell it today you would earn a total of 462.00 from holding Vanguard Emerging Markets or generate 19.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. Matthews Asian Growth
Performance |
| Timeline |
| Vanguard Emerging Markets |
| Matthews Asian Growth |
Vanguard Emerging and Matthews Asian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and Matthews Asian
The main advantage of trading using opposite Vanguard Emerging and Matthews Asian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Emerging position performs unexpectedly, Matthews Asian 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 Asian will offset losses from the drop in Matthews Asian's long position.| Vanguard Emerging vs. Vanguard Emerging Markets | Vanguard Emerging vs. Vanguard Emerging Markets | Vanguard Emerging vs. Vanguard Emerging Markets | Vanguard Emerging vs. American Funds New |
| Matthews Asian vs. Vanguard Emerging Markets | Matthews Asian vs. Blrc Sgy Mnp | Matthews Asian vs. Ab Select Longshort | Matthews Asian vs. California Bond 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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