Correlation Between Carriage Services and Matthews International

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

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

Diversification Opportunities for Carriage Services and Matthews International

0.9

Correlation Coefficient

Carriage Services  Matthews International

Almost no diversification

The 3 months correlation between Carriage and Matthews is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Carriage Services and Matthews International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International and Carriage Services 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 Carriage Services 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 Carriage Services i.e., Carriage Services and Matthews International go up and down completely randomly.

Pair Corralation between Carriage Services and Matthews International

Considering the 90-day investment horizon Carriage Services is expected to generate 1.71 times less return on investment than Matthews International. But when comparing it to its historical volatility, Carriage Services is 1.92 times less risky than Matthews International. It trades about 0.16 of its potential returns per unit of risk. Matthews International is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,958  in Matthews International on May 1, 2025 and sell it today you would earn a total of  429.00  from holding Matthews International or generate 21.91% return on investment over 90 days.

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

Carriage Services  vs.  Matthews International

Carriage Services

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Carriage Services are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Carriage Services showed solid returns over the last few months and may actually be approaching a breakup point.

Matthews International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Matthews International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Matthews International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carriage Services and Matthews International

The main advantage of trading using opposite Carriage Services and Matthews International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carriage Services 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 Carriage Services and Matthews International 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.