Correlation Between Artisan Global and Matthews China

Can any of the company-specific risk be diversified away by investing in both Artisan Global 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 Artisan Global and Matthews China into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Artisan Global Opportunities and Matthews China Small, you can compare the effects of market volatilities on Artisan Global 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 Artisan Global with a short position of Matthews China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Global and Matthews China.

Diversification Opportunities for Artisan Global and Matthews China

0.69

Correlation Coefficient

Artisan Global  Matthews China

Poor diversification

The 3 months correlation between Artisan and Matthews is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Global Opportunities and Matthews China Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews China Small and Artisan Global 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 Artisan Global Opportunities 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 Small has no effect on the direction of Artisan Global i.e., Artisan Global and Matthews China go up and down completely randomly.

Pair Corralation between Artisan Global and Matthews China

Assuming the 90 days horizon Artisan Global is expected to generate 2.14 times less return on investment than Matthews China. But when comparing it to its historical volatility, Artisan Global Opportunities is 2.9 times less risky than Matthews China. It trades about 0.13 of its potential returns per unit of risk. Matthews China Small is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  800.00  in Matthews China Small on September 2, 2024 and sell it today you would earn a total of  103.00  from holding Matthews China Small or generate 12.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Artisan Global Opportunities  vs.  Matthews China Small

Artisan Global Oppor

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Global Opportunities are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Artisan Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Matthews China Small

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Matthews China Small are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Matthews China showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Artisan Global and Matthews China

The main advantage of trading using opposite Artisan Global and Matthews China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Global 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.

The idea behind Artisan Global Opportunities and Matthews China Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.