Correlation Between Matthews India and Guinness Atkinson

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

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

Diversification Opportunities for Matthews India and Guinness Atkinson

-0.69

Correlation Coefficient

Matthews India  Guinness Atkinson

Excellent diversification

The 3 months correlation between Matthews and Guinness is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Matthews India Fund and Guinness Atkinson China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson China and Matthews India 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 India Fund are associated (or correlated) with Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson China has no effect on the direction of Matthews India i.e., Matthews India and Guinness Atkinson go up and down completely randomly.

Pair Corralation between Matthews India and Guinness Atkinson

Assuming the 90 days horizon Matthews India Fund is expected to under-perform the Guinness Atkinson. But the mutual fund apears to be less risky and, when comparing its historical volatility, Matthews India Fund is 1.33 times less risky than Guinness Atkinson. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Guinness Atkinson China is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,271  in Guinness Atkinson China on December 30, 2024 and sell it today you would earn a total of  137.00  from holding Guinness Atkinson China or generate 10.78% return on investment over 90 days.

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

Matthews India Fund  vs.  Guinness Atkinson China

Matthews India

Risk-Adjusted Performance

Very Weak

Over the last 90 days Matthews India Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Guinness Atkinson China

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guinness Atkinson China are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Guinness Atkinson may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Matthews India and Guinness Atkinson

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

The idea behind Matthews India Fund and Guinness Atkinson China 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.