Correlation Between Matthews China and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both Matthews China and SPDR Portfolio 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 China and SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews China Discovery and SPDR Portfolio SP, you can compare the effects of market volatilities on Matthews China and SPDR Portfolio 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 China with a short position of SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews China and SPDR Portfolio.
Diversification Opportunities for Matthews China and SPDR Portfolio
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Matthews and SPDR is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Matthews China Discovery and SPDR Portfolio SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio SP and Matthews China 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 China Discovery are associated (or correlated) with SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio SP has no effect on the direction of Matthews China i.e., Matthews China and SPDR Portfolio go up and down completely randomly.
Pair Corralation between Matthews China and SPDR Portfolio
Given the investment horizon of 90 days Matthews China Discovery is expected to generate 1.89 times more return on investment than SPDR Portfolio. However, Matthews China is 1.89 times more volatile than SPDR Portfolio SP. It trades about 0.29 of its potential returns per unit of risk. SPDR Portfolio SP is currently generating about 0.24 per unit of risk. If you would invest 2,759 in Matthews China Discovery on May 31, 2025 and sell it today you would earn a total of 610.00 from holding Matthews China Discovery or generate 22.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews China Discovery vs. SPDR Portfolio SP
Performance |
| Timeline |
| Matthews China Discovery |
| SPDR Portfolio SP |
Matthews China and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews China and SPDR Portfolio
The main advantage of trading using opposite Matthews China and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews China position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.| Matthews China vs. Matthews Emerging Markets | Matthews China vs. Morgan Stanley Pathway | Matthews China vs. Neuberger Berman ETF | Matthews China vs. Harbor ETF Trust |
| SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. Invesco NASDAQ 100 | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Portfolio SP |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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