Correlation Between Invesco China and CHIM
Can any of the company-specific risk be diversified away by investing in both Invesco China and CHIM 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 Invesco China and CHIM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco China Technology and CHIM, you can compare the effects of market volatilities on Invesco China and CHIM 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 Invesco China with a short position of CHIM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco China and CHIM.
Diversification Opportunities for Invesco China and CHIM
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and CHIM is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Invesco China Technology and CHIM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIM and Invesco China 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 Invesco China Technology are associated (or correlated) with CHIM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIM has no effect on the direction of Invesco China i.e., Invesco China and CHIM go up and down completely randomly.
Pair Corralation between Invesco China and CHIM
If you would invest 2,987 in Invesco China Technology on November 4, 2024 and sell it today you would earn a total of 1,196 from holding Invesco China Technology or generate 40.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Invesco China Technology vs. CHIM
Performance |
| Timeline |
| Invesco China Technology |
| CHIM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Invesco China and CHIM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco China and CHIM
The main advantage of trading using opposite Invesco China and CHIM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco China position performs unexpectedly, CHIM 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 CHIM will offset losses from the drop in CHIM's long position.| Invesco China vs. KraneShares CSI China | Invesco China vs. iShares MSCI China | Invesco China vs. Global X MSCI | Invesco China vs. Xtrackers Harvest CSI |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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