Correlation Between CHIM and PGAL
Can any of the company-specific risk be diversified away by investing in both CHIM and PGAL 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 CHIM and PGAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHIM and PGAL, you can compare the effects of market volatilities on CHIM and PGAL 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 CHIM with a short position of PGAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHIM and PGAL.
Diversification Opportunities for CHIM and PGAL
Poor diversification
The 3 months correlation between CHIM and PGAL is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CHIM and PGAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGAL and CHIM 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 CHIM are associated (or correlated) with PGAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGAL has no effect on the direction of CHIM i.e., CHIM and PGAL go up and down completely randomly.
Pair Corralation between CHIM and PGAL
If you would invest 1,071 in PGAL on September 12, 2024 and sell it today you would earn a total of 0.00 from holding PGAL or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHIM vs. PGAL
Performance |
| Timeline |
| CHIM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PGAL |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CHIM and PGAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHIM and PGAL
The main advantage of trading using opposite CHIM and PGAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHIM position performs unexpectedly, PGAL 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 PGAL will offset losses from the drop in PGAL's long position.| CHIM vs. KraneShares CSI China | CHIM vs. Invesco China Technology | CHIM vs. iShares MSCI India | CHIM vs. Xtrackers Harvest CSI |
| PGAL vs. iShares MSCI Ireland | PGAL vs. Global X MSCI | PGAL vs. iShares MSCI Finland | PGAL vs. Global X MSCI |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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