Correlation Between Payson Total and Matthews Asia

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

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

Diversification Opportunities for Payson Total and Matthews Asia

0.89

Correlation Coefficient

Payson Total  Matthews Asia

Very poor diversification

The 3 months correlation between Payson and Matthews is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Payson Total Return and Matthews Asia Innovators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Asia Innovators and Payson Total 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 Payson Total Return 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 Innovators has no effect on the direction of Payson Total i.e., Payson Total and Matthews Asia go up and down completely randomly.

Pair Corralation between Payson Total and Matthews Asia

Assuming the 90 days horizon Payson Total is expected to generate 1.21 times less return on investment than Matthews Asia. But when comparing it to its historical volatility, Payson Total Return is 1.52 times less risky than Matthews Asia. It trades about 0.14 of its potential returns per unit of risk. Matthews Asia Innovators is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,580  in Matthews Asia Innovators on August 12, 2025 and sell it today you would earn a total of  140.00  from holding Matthews Asia Innovators or generate 8.86% return on investment over 90 days.

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

Payson Total Return  vs.  Matthews Asia Innovators

Payson Total Return

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Payson Total Return are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Payson Total may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Matthews Asia Innovators

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Matthews Asia Innovators are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Matthews Asia may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Payson Total and Matthews Asia

The main advantage of trading using opposite Payson Total and Matthews Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payson Total 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 Payson Total Return and Matthews Asia Innovators 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.