Correlation Between Matthews China and Artisan Global

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

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

Diversification Opportunities for Matthews China and Artisan Global

-0.42

Correlation Coefficient

Matthews China  Artisan Global

Very good diversification

The 3 months correlation between Matthews and Artisan is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Small and Artisan Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Global Oppor 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 Small are associated (or correlated) with Artisan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Global Oppor has no effect on the direction of Matthews China i.e., Matthews China and Artisan Global go up and down completely randomly.

Pair Corralation between Matthews China and Artisan Global

Assuming the 90 days horizon Matthews China Small is expected to generate 1.16 times more return on investment than Artisan Global. However, Matthews China is 1.16 times more volatile than Artisan Global Opportunities. It trades about 0.1 of its potential returns per unit of risk. Artisan Global Opportunities is currently generating about -0.06 per unit of risk. If you would invest  912.00  in Matthews China Small on December 30, 2024 and sell it today you would earn a total of  72.00  from holding Matthews China Small or generate 7.89% return on investment over 90 days.

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

Matthews China Small  vs.  Artisan Global Opportunities

Matthews China Small

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Matthews China Small are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Matthews China may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Artisan Global Oppor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artisan Global Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Artisan Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Matthews China and Artisan Global

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

The idea behind Matthews China Small and Artisan Global Opportunities 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.