Correlation Between Matthews China and Advisor Managed

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

By analyzing existing cross correlation between Matthews China Discovery and Advisor Managed Portfolios, you can compare the effects of market volatilities on Matthews China and Advisor Managed 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 Advisor Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and Advisor Managed.

Diversification Opportunities for Matthews China and Advisor Managed

-0.6

Correlation Coefficient

Matthews China  Advisor Managed

Excellent diversification

The 3 months correlation between Matthews and Advisor is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Discovery and Advisor Managed Portfolios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advisor Managed Port 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 Discovery are associated (or correlated) with Advisor Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advisor Managed Port has no effect on the direction of Matthews China i.e., Matthews China and Advisor Managed go up and down completely randomly.

Pair Corralation between Matthews China and Advisor Managed

Given the investment horizon of 90 days Matthews China Discovery is expected to generate 0.83 times more return on investment than Advisor Managed. However, Matthews China Discovery is 1.21 times less risky than Advisor Managed. It trades about 0.11 of its potential returns per unit of risk. Advisor Managed Portfolios is currently generating about -0.1 per unit of risk. If you would invest  2,574  in Matthews China Discovery on December 29, 2024 and sell it today you would earn a total of  243.00  from holding Matthews China Discovery or generate 9.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Matthews China Discovery  vs.  Advisor Managed Portfolios

Matthews China Discovery

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Matthews China Discovery are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical indicators, Matthews China may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Advisor Managed Port

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advisor Managed Portfolios has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Etf's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Pair Trading with Matthews China and Advisor Managed

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

The idea behind Matthews China Discovery and Advisor Managed Portfolios 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.