Correlation Between Matthews International and Alpine 4

Can any of the company-specific risk be diversified away by investing in both Matthews International and Alpine 4 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 Matthews International and Alpine 4 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Matthews International and Alpine 4 Holdings, you can compare the effects of market volatilities on Matthews International and Alpine 4 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 Matthews International with a short position of Alpine 4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews International and Alpine 4.

Diversification Opportunities for Matthews International and Alpine 4

-0.8

Correlation Coefficient

Matthews International  Alpine 4

Pay attention - limited upside

The 3 months correlation between Matthews and Alpine is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Matthews International and Alpine 4 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine 4 Holdings and Matthews International 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 Matthews International are associated (or correlated) with Alpine 4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine 4 Holdings has no effect on the direction of Matthews International i.e., Matthews International and Alpine 4 go up and down completely randomly.

Pair Corralation between Matthews International and Alpine 4

If you would invest  2,416  in Matthews International on September 12, 2024 and sell it today you would earn a total of  682.00  from holding Matthews International or generate 28.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	4.55%
Values	Daily Returns

Matthews International  vs.  Alpine 4 Holdings

Matthews International

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Matthews International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Matthews International showed solid returns over the last few months and may actually be approaching a breakup point.

Alpine 4 Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpine 4 Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Matthews International and Alpine 4

The main advantage of trading using opposite Matthews International and Alpine 4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews International position performs unexpectedly, Alpine 4 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 Alpine 4 will offset losses from the drop in Alpine 4's long position.

The idea behind Matthews International and Alpine 4 Holdings 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.