Correlation Between Vanguard Total and Matthews Emerging
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Matthews Emerging 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 Total and Matthews Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total World and Matthews Emerging Markets, you can compare the effects of market volatilities on Vanguard Total and Matthews Emerging 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 Total with a short position of Matthews Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Matthews Emerging.
Diversification Opportunities for Vanguard Total and Matthews Emerging
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vanguard and Matthews is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total World and Matthews Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Emerging Markets and Vanguard Total 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 Total World are associated (or correlated) with Matthews Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Emerging Markets has no effect on the direction of Vanguard Total i.e., Vanguard Total and Matthews Emerging go up and down completely randomly.
Pair Corralation between Vanguard Total and Matthews Emerging
Allowing for the 90-day total investment horizon Vanguard Total World is expected to generate 1.06 times more return on investment than Matthews Emerging. However, Vanguard Total is 1.06 times more volatile than Matthews Emerging Markets. It trades about 0.13 of its potential returns per unit of risk. Matthews Emerging Markets is currently generating about 0.06 per unit of risk. If you would invest 11,716 in Vanguard Total World on October 20, 2024 and sell it today you would earn a total of 232.00 from holding Vanguard Total World or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total World vs. Matthews Emerging Markets
Performance |
| Timeline |
| Vanguard Total World |
| Matthews Emerging Markets |
Vanguard Total and Matthews Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Matthews Emerging
The main advantage of trading using opposite Vanguard Total and Matthews Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Matthews Emerging 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 Emerging will offset losses from the drop in Matthews Emerging's long position.| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Stock | Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard FTSE Emerging |
| Matthews Emerging vs. Matthews Asia Innovators | Matthews Emerging vs. Columbia EM Core | Matthews Emerging vs. MAYBANK EMERGING ETF | Matthews Emerging vs. Matthews China Active |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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