Correlation Between Matthews China and Cyteir Therapeutics

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

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

Diversification Opportunities for Matthews China and Cyteir Therapeutics

-0.33

Correlation Coefficient

Matthews China  Cyteir Therapeutics

Very good diversification

The 3 months correlation between Matthews and Cyteir is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Active and Cyteir Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyteir Therapeutics and Matthews China 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 China Active are associated (or correlated) with Cyteir Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyteir Therapeutics has no effect on the direction of Matthews China i.e., Matthews China and Cyteir Therapeutics go up and down completely randomly.

Pair Corralation between Matthews China and Cyteir Therapeutics

Considering the 90-day investment horizon Matthews China Active is expected to under-perform the Cyteir Therapeutics. But the etf apears to be less risky and, when comparing its historical volatility, Matthews China Active is 2.53 times less risky than Cyteir Therapeutics. The etf trades about -0.02 of its potential returns per unit of risk. The Cyteir Therapeutics is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  163.00  in Cyteir Therapeutics on October 11, 2024 and sell it today you would earn a total of  113.00  from holding Cyteir Therapeutics or generate 69.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	25.6%
Values	Daily Returns

Matthews China Active  vs.  Cyteir Therapeutics

Matthews China Active

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Matthews China Active has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the Etf traders.

Cyteir Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cyteir Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cyteir Therapeutics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Matthews China and Cyteir Therapeutics

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

The idea behind Matthews China Active and Cyteir Therapeutics 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.