Correlation Between Matthews China and JPMorgan Realty

Can any of the company-specific risk be diversified away by investing in both Matthews China and JPMorgan Realty 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 JPMorgan Realty 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 JPMorgan Realty Income, you can compare the effects of market volatilities on Matthews China and JPMorgan Realty 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 JPMorgan Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and JPMorgan Realty.

Diversification Opportunities for Matthews China and JPMorgan Realty

0.31

Correlation Coefficient

Matthews China  JPMorgan Realty

Weak diversification

The 3 months correlation between Matthews and JPMorgan is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Active and JPMorgan Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Realty Income 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 JPMorgan Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Realty Income has no effect on the direction of Matthews China i.e., Matthews China and JPMorgan Realty go up and down completely randomly.

Pair Corralation between Matthews China and JPMorgan Realty

Considering the 90-day investment horizon Matthews China Active is expected to under-perform the JPMorgan Realty. In addition to that, Matthews China is 1.07 times more volatile than JPMorgan Realty Income. It trades about -0.49 of its total potential returns per unit of risk. JPMorgan Realty Income is currently generating about -0.34 per unit of volatility. If you would invest  5,024  in JPMorgan Realty Income on October 10, 2024 and sell it today you would lose (392.00) from holding JPMorgan Realty Income or give up 7.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Matthews China Active  vs.  JPMorgan Realty Income

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.

JPMorgan Realty Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan Realty Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, JPMorgan Realty is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Matthews China and JPMorgan Realty

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

The idea behind Matthews China Active and JPMorgan Realty Income 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.