Correlation Between Pace Municipal and Matthews Asia
Can any of the company-specific risk be diversified away by investing in both Pace Municipal 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 Pace Municipal and Matthews Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Municipal Fixed and Matthews Asia Growth, you can compare the effects of market volatilities on Pace Municipal 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 Pace Municipal with a short position of Matthews Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Municipal and Matthews Asia.
Diversification Opportunities for Pace Municipal and Matthews Asia
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pace and Matthews is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pace Municipal Fixed and Matthews Asia Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Asia Growth and Pace Municipal 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 Pace Municipal Fixed 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 Growth has no effect on the direction of Pace Municipal i.e., Pace Municipal and Matthews Asia go up and down completely randomly.
Pair Corralation between Pace Municipal and Matthews Asia
Assuming the 90 days horizon Pace Municipal is expected to generate 1.16 times less return on investment than Matthews Asia. But when comparing it to its historical volatility, Pace Municipal Fixed is 10.09 times less risky than Matthews Asia. It trades about 0.42 of its potential returns per unit of risk. Matthews Asia Growth is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,579 in Matthews Asia Growth on August 31, 2025 and sell it today you would earn a total of 86.00 from holding Matthews Asia Growth or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Municipal Fixed vs. Matthews Asia Growth
Performance |
| Timeline |
| Pace Municipal Fixed |
| Matthews Asia Growth |
Pace Municipal and Matthews Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Municipal and Matthews Asia
The main advantage of trading using opposite Pace Municipal and Matthews Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Municipal 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.| Pace Municipal vs. Columbia Real Estate | Pace Municipal vs. Global Real Estate | Pace Municipal vs. Redwood Real Estate | Pace Municipal vs. Franklin Real Estate |
| Matthews Asia vs. Morningstar Aggressive Growth | Matthews Asia vs. Vanguard High Yield Tax Exempt | Matthews Asia vs. Transamerica High Yield | Matthews Asia vs. Saat Tax Managed Aggressive |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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