Correlation Between CHIU and BFIT
Can any of the company-specific risk be diversified away by investing in both CHIU and BFIT 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 CHIU and BFIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHIU and BFIT, you can compare the effects of market volatilities on CHIU and BFIT 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 CHIU with a short position of BFIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHIU and BFIT.
Diversification Opportunities for CHIU and BFIT
Average diversification
The 3 months correlation between CHIU and BFIT is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding CHIU and BFIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BFIT and CHIU 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 CHIU are associated (or correlated) with BFIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BFIT has no effect on the direction of CHIU i.e., CHIU and BFIT go up and down completely randomly.
Pair Corralation between CHIU and BFIT
If you would invest 2,285 in BFIT on August 26, 2024 and sell it today you would earn a total of 0.00 from holding BFIT or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHIU vs. BFIT
Performance |
| Timeline |
| CHIU |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| BFIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CHIU and BFIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHIU and BFIT
The main advantage of trading using opposite CHIU and BFIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHIU position performs unexpectedly, BFIT 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 BFIT will offset losses from the drop in BFIT's long position.| CHIU vs. iShares MSCI Singapore | CHIU vs. iShares MSCI Taiwan | CHIU vs. iShares MSCI Malaysia | CHIU vs. iShares MSCI Australia |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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