Correlation Between Strategy Shares and Matthews China

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

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

Diversification Opportunities for Strategy Shares and Matthews China

0.08

Correlation Coefficient

Strategy Shares  Matthews China

Significant diversification

The 3 months correlation between Strategy and Matthews is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Strategy Shares and Matthews China Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews China Discovery and Strategy Shares 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 Strategy Shares 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 Discovery has no effect on the direction of Strategy Shares i.e., Strategy Shares and Matthews China go up and down completely randomly.

Pair Corralation between Strategy Shares and Matthews China

Given the investment horizon of 90 days Strategy Shares is expected to generate 130.27 times more return on investment than Matthews China. However, Strategy Shares is 130.27 times more volatile than Matthews China Discovery. It trades about 0.25 of its potential returns per unit of risk. Matthews China Discovery is currently generating about 0.02 per unit of risk. If you would invest  0.00  in Strategy Shares on October 11, 2024 and sell it today you would earn a total of  2,458  from holding Strategy Shares or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	6.37%
Values	Daily Returns

Strategy Shares  vs.  Matthews China Discovery

Strategy Shares

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Strategy Shares are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Strategy Shares displayed solid returns over the last few months and may actually be approaching a breakup point.

Matthews China Discovery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Matthews China Discovery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with Strategy Shares and Matthews China

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