Correlation Between Touchstone Sands and Matthews Asia

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

By analyzing existing cross correlation between Touchstone Sands Capital and Matthews Asia Small, you can compare the effects of market volatilities on Touchstone Sands and Matthews Asia 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 Touchstone Sands with a short position of Matthews Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Sands and Matthews Asia.

Diversification Opportunities for Touchstone Sands and Matthews Asia

0.93

Correlation Coefficient

Touchstone Sands  Matthews Asia

Almost no diversification

The 3 months correlation between Touchstone and Matthews is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Sands Capital and Matthews Asia Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Asia Small and Touchstone Sands 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 Touchstone Sands Capital are associated (or correlated) with Matthews Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Asia Small has no effect on the direction of Touchstone Sands i.e., Touchstone Sands and Matthews Asia go up and down completely randomly.

Pair Corralation between Touchstone Sands and Matthews Asia

Assuming the 90 days horizon Touchstone Sands Capital is expected to generate 1.14 times more return on investment than Matthews Asia. However, Touchstone Sands is 1.14 times more volatile than Matthews Asia Small. It trades about 0.3 of its potential returns per unit of risk. Matthews Asia Small is currently generating about 0.13 per unit of risk. If you would invest  1,764  in Touchstone Sands Capital on May 4, 2025 and sell it today you would earn a total of  371.00  from holding Touchstone Sands Capital or generate 21.03% return on investment over 90 days.

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

Touchstone Sands Capital  vs.  Matthews Asia Small

Touchstone Sands Capital

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Touchstone Sands Capital are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Touchstone Sands showed solid returns over the last few months and may actually be approaching a breakup point.

Matthews Asia Small

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Matthews Asia Small are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Matthews Asia may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Touchstone Sands and Matthews Asia

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

The idea behind Touchstone Sands Capital and Matthews Asia Small 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.