Correlation Between ERShares Private and Matthews China
Can any of the company-specific risk be diversified away by investing in both ERShares Private and Matthews China 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 ERShares Private and Matthews China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ERShares Private Public Crossover and Matthews China Discovery, you can compare the effects of market volatilities on ERShares Private and Matthews China 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 ERShares Private with a short position of Matthews China. Check out your portfolio center. Please also check ongoing floating volatility patterns of ERShares Private and Matthews China.
Diversification Opportunities for ERShares Private and Matthews China
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ERShares and Matthews is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding ERShares Private Public Crosso and Matthews China Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews China Discovery and ERShares Private 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 ERShares Private Public Crossover are associated (or correlated) with Matthews China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews China Discovery has no effect on the direction of ERShares Private i.e., ERShares Private and Matthews China go up and down completely randomly.
Pair Corralation between ERShares Private and Matthews China
Given the investment horizon of 90 days ERShares Private Public Crossover is expected to under-perform the Matthews China. In addition to that, ERShares Private is 1.1 times more volatile than Matthews China Discovery. It trades about -0.1 of its total potential returns per unit of risk. Matthews China Discovery is currently generating about 0.13 per unit of volatility. If you would invest 2,574 in Matthews China Discovery on December 28, 2024 and sell it today you would earn a total of 298.00 from holding Matthews China Discovery or generate 11.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.36% |
Values | Daily Returns |
ERShares Private Public Crosso vs. Matthews China Discovery
Performance |
Timeline |
ERShares Private Public |
Matthews China Discovery |
ERShares Private and Matthews China Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ERShares Private and Matthews China
The main advantage of trading using opposite ERShares Private and Matthews China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ERShares Private position performs unexpectedly, Matthews China 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 Matthews China will offset losses from the drop in Matthews China's long position.ERShares Private vs. JPMorgan Fundamental Data | ERShares Private vs. Vanguard Mid Cap Index | ERShares Private vs. SPDR SP 400 | ERShares Private vs. SPDR SP 400 |
Matthews China vs. Matthews Emerging Markets | Matthews China vs. Morgan Stanley Pathway | Matthews China vs. Neuberger Berman ETF | Matthews China vs. Fidelity Small Mid Cap |
Check out your portfolio center.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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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