Correlation Between JPMorgan BetaBuilders and Matthews International

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

By analyzing existing cross correlation between JPMorgan BetaBuilders Developed and Matthews International Funds, you can compare the effects of market volatilities on JPMorgan BetaBuilders and Matthews International 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 JPMorgan BetaBuilders with a short position of Matthews International. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan BetaBuilders and Matthews International.

Diversification Opportunities for JPMorgan BetaBuilders and Matthews International

0.81

Correlation Coefficient

JPMorgan BetaBuilders  Matthews International

Very poor diversification

The 3 months correlation between JPMorgan and Matthews is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan BetaBuilders Develope and Matthews International Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International and JPMorgan BetaBuilders 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 JPMorgan BetaBuilders Developed are associated (or correlated) with Matthews International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews International has no effect on the direction of JPMorgan BetaBuilders i.e., JPMorgan BetaBuilders and Matthews International go up and down completely randomly.

Pair Corralation between JPMorgan BetaBuilders and Matthews International

Given the investment horizon of 90 days JPMorgan BetaBuilders is expected to generate 1.36 times less return on investment than Matthews International. But when comparing it to its historical volatility, JPMorgan BetaBuilders Developed is 1.34 times less risky than Matthews International. It trades about 0.06 of its potential returns per unit of risk. Matthews International Funds is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,566  in Matthews International Funds on September 2, 2024 and sell it today you would earn a total of  132.00  from holding Matthews International Funds or generate 5.14% return on investment over 90 days.

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

JPMorgan BetaBuilders Develope  vs.  Matthews International Funds

JPMorgan BetaBuilders

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan BetaBuilders Developed are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, JPMorgan BetaBuilders is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Matthews International

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Matthews International Funds are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Matthews International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JPMorgan BetaBuilders and Matthews International

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

The idea behind JPMorgan BetaBuilders Developed and Matthews International Funds 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..