Correlation Between William Blair and Matthews China
Can any of the company-specific risk be diversified away by investing in both William Blair 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 William Blair and Matthews China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between William Blair China and Matthews China Fund, you can compare the effects of market volatilities on William Blair 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 William Blair with a short position of Matthews China. Check out your portfolio center. Please also check ongoing floating volatility patterns of William Blair and Matthews China.
Diversification Opportunities for William Blair and Matthews China
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between William and Matthews is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding William Blair China and Matthews China Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews China and William Blair 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 William Blair China 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 William Blair i.e., William Blair and Matthews China go up and down completely randomly.
Pair Corralation between William Blair and Matthews China
Assuming the 90 days horizon William Blair is expected to generate 8.26 times less return on investment than Matthews China. But when comparing it to its historical volatility, William Blair China is 1.54 times less risky than Matthews China. It trades about 0.01 of its potential returns per unit of risk. Matthews China Fund is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,228 in Matthews China Fund on September 1, 2024 and sell it today you would earn a total of 153.00 from holding Matthews China Fund or generate 12.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
William Blair China vs. Matthews China Fund
Performance |
| Timeline |
| William Blair China |
| Matthews China |
William Blair and Matthews China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with William Blair and Matthews China
The main advantage of trading using opposite William Blair and Matthews China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if William Blair 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.| William Blair vs. William Blair Small Mid | William Blair vs. William Blair Small Mid | William Blair vs. William Blair Small Mid | William Blair vs. William Blair Small Mid |
| Matthews China vs. Matthews Pacific Tiger | Matthews China vs. Matthews India Fund | Matthews China vs. Matthews Asia Growth | Matthews China vs. Matthews China Dividend |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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