Correlation Between Matthews International and Halma Plc

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

By analyzing existing cross correlation between Matthews International and Halma plc, you can compare the effects of market volatilities on Matthews International and Halma Plc 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 Halma Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews International and Halma Plc.

Diversification Opportunities for Matthews International and Halma Plc

0.0

Correlation Coefficient

Matthews International  Halma Plc

Pay attention - limited upside

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

Pair Corralation between Matthews International and Halma Plc

If you would invest (100.00) in Halma plc on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Halma plc 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

Matthews International  vs.  Halma plc

Matthews International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Matthews International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Halma plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Halma plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Halma Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Matthews International and Halma Plc

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

The idea behind Matthews International and Halma plc 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.