Correlation Between WisdomTree Managed and Matthews International
Can any of the company-specific risk be diversified away by investing in both WisdomTree Managed 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 WisdomTree Managed and Matthews International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Managed Futures and Matthews International Funds, you can compare the effects of market volatilities on WisdomTree Managed 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 WisdomTree Managed with a short position of Matthews International. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Managed and Matthews International.
Diversification Opportunities for WisdomTree Managed and Matthews International
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WisdomTree and Matthews is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Managed Futures and Matthews International Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International and WisdomTree Managed 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 WisdomTree Managed Futures 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 WisdomTree Managed i.e., WisdomTree Managed and Matthews International go up and down completely randomly.
Pair Corralation between WisdomTree Managed and Matthews International
Given the investment horizon of 90 days WisdomTree Managed Futures is expected to generate 0.59 times more return on investment than Matthews International. However, WisdomTree Managed Futures is 1.69 times less risky than Matthews International. It trades about 0.01 of its potential returns per unit of risk. Matthews International Funds is currently generating about -0.04 per unit of risk. If you would invest 3,576 in WisdomTree Managed Futures on September 3, 2024 and sell it today you would earn a total of 28.00 from holding WisdomTree Managed Futures or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Managed Futures vs. Matthews International Funds
Performance |
| Timeline |
| WisdomTree Managed |
| Matthews International |
WisdomTree Managed and Matthews International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Managed and Matthews International
The main advantage of trading using opposite WisdomTree Managed and Matthews International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Managed 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.| WisdomTree Managed vs. First Trust Managed | WisdomTree Managed vs. iMGP DBi Managed | WisdomTree Managed vs. First Trust LongShort | WisdomTree Managed vs. WisdomTree CBOE SP |
| Matthews International vs. Freedom Day Dividend | Matthews International vs. iShares MSCI China | Matthews International vs. SmartETFs Dividend Builder | Matthews International vs. Tidal ETF Trust |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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