Correlation Between Matthews Asia and Matthews Emerging

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

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

Diversification Opportunities for Matthews Asia and Matthews Emerging

0.98

Correlation Coefficient

Matthews Asia  Matthews Emerging

Almost no diversification

The 3 months correlation between Matthews and Matthews is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Asia Esg and Matthews Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Emerging Markets and Matthews Asia 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 Asia Esg are associated (or correlated) with Matthews Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Emerging Markets has no effect on the direction of Matthews Asia i.e., Matthews Asia and Matthews Emerging go up and down completely randomly.

Pair Corralation between Matthews Asia and Matthews Emerging

Assuming the 90 days horizon Matthews Asia is expected to generate 1.34 times less return on investment than Matthews Emerging. In addition to that, Matthews Asia is 1.22 times more volatile than Matthews Emerging Markets. It trades about 0.1 of its total potential returns per unit of risk. Matthews Emerging Markets is currently generating about 0.16 per unit of volatility. If you would invest  1,371  in Matthews Emerging Markets on May 6, 2025 and sell it today you would earn a total of  108.00  from holding Matthews Emerging Markets or generate 7.88% return on investment over 90 days.

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

Matthews Asia Esg  vs.  Matthews Emerging Markets

Matthews Asia Esg

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Matthews Asia Esg are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Matthews Asia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Matthews Emerging Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Matthews Emerging Markets are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Matthews Emerging may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Matthews Asia and Matthews Emerging

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

The idea behind Matthews Asia Esg and Matthews Emerging Markets 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.