Correlation Between 1847 Holdings and Matthews International

Can any of the company-specific risk be diversified away by investing in both 1847 Holdings 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 1847 Holdings and Matthews International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1847 Holdings LLC and Matthews International, you can compare the effects of market volatilities on 1847 Holdings 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 1847 Holdings with a short position of Matthews International. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1847 Holdings and Matthews International.

Diversification Opportunities for 1847 Holdings and Matthews International

-0.12

Correlation Coefficient

1847 Holdings  Matthews International

Good diversification

The 3 months correlation between 1847 and Matthews is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding 1847 Holdings LLC and Matthews International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International and 1847 Holdings 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 1847 Holdings LLC 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 1847 Holdings i.e., 1847 Holdings and Matthews International go up and down completely randomly.

Pair Corralation between 1847 Holdings and Matthews International

Given the investment horizon of 90 days 1847 Holdings LLC is expected to under-perform the Matthews International. In addition to that, 1847 Holdings is 6.03 times more volatile than Matthews International. It trades about -0.08 of its total potential returns per unit of risk. Matthews International is currently generating about -0.02 per unit of volatility. If you would invest  2,990  in Matthews International on March 7, 2024 and sell it today you would lose (115.00) from holding Matthews International or give up 3.85% of portfolio value over 90 days.

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

1847 Holdings LLC  vs.  Matthews International

1847 Holdings LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1847 Holdings LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Matthews International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Matthews International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Matthews International is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with 1847 Holdings and Matthews International

The main advantage of trading using opposite 1847 Holdings and Matthews International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1847 Holdings 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 1847 Holdings LLC 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.