Correlation Between IShares and Matthews Emerging

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

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

Diversification Opportunities for IShares and Matthews Emerging

0.0

Correlation Coefficient

IShares  Matthews Emerging

Pay attention - limited upside

The 3 months correlation between IShares and Matthews is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IShares and Matthews Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Emerging Markets and IShares 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 IShares are associated (or correlated) with Matthews Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Emerging Markets has no effect on the direction of IShares i.e., IShares and Matthews Emerging go up and down completely randomly.

Pair Corralation between IShares and Matthews Emerging

If you would invest (100.00) in IShares on December 21, 2024 and sell it today you would earn a total of  100.00  from holding IShares or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

IShares  vs.  Matthews Emerging Markets

IShares

Risk-Adjusted Performance

Very Weak

Over the last 90 days IShares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, IShares is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Matthews Emerging Markets

Risk-Adjusted Performance

Very Weak

Over the last 90 days Matthews Emerging Markets has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Matthews Emerging is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares and Matthews Emerging

The main advantage of trading using opposite IShares and Matthews Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares position performs unexpectedly, Matthews Emerging 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 Emerging will offset losses from the drop in Matthews Emerging's long position.

The idea behind IShares and Matthews Emerging Markets 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..