Correlation Between Wex and Matthews International
Can any of the company-specific risk be diversified away by investing in both Wex and Matthews International 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 Wex and Matthews International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wex Inc and Matthews International, you can compare the effects of market volatilities on Wex and Matthews International 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 Wex with a short position of Matthews International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wex and Matthews International.
Diversification Opportunities for Wex and Matthews International
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wex and Matthews is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Wex Inc and Matthews International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International and Wex 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 Wex Inc are associated (or correlated) with Matthews International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews International has no effect on the direction of Wex i.e., Wex and Matthews International go up and down completely randomly.
Pair Corralation between Wex and Matthews International
Considering the 90-day investment horizon Wex Inc is expected to under-perform the Matthews International. In addition to that, Wex is 1.7 times more volatile than Matthews International. It trades about -0.17 of its total potential returns per unit of risk. Matthews International is currently generating about 0.3 per unit of volatility. If you would invest 2,220 in Matthews International on August 24, 2024 and sell it today you would earn a total of 329.00 from holding Matthews International or generate 14.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Wex Inc vs. Matthews International
Performance |
| Timeline |
| Wex Inc |
| Matthews International |
Wex and Matthews International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wex and Matthews International
The main advantage of trading using opposite Wex and Matthews International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wex position performs unexpectedly, Matthews International 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 International will offset losses from the drop in Matthews International's long position.| Wex vs. CSG Systems International | Wex vs. VeriSign | Wex vs. Consensus Cloud Solutions | Wex vs. Global Blue Group |
| Matthews International vs. Steel Partners Holdings | Matthews International vs. Compass Diversified | Matthews International vs. Brookfield Business Partners | Matthews International vs. Tejon Ranch Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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