Correlation Between Invesco China and CHIS
Can any of the company-specific risk be diversified away by investing in both Invesco China and CHIS 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 CHIS 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 CHIS, you can compare the effects of market volatilities on Invesco China and CHIS 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 CHIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco China and CHIS.
Diversification Opportunities for Invesco China and CHIS
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Invesco and CHIS is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Invesco China Technology and CHIS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIS 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 CHIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIS has no effect on the direction of Invesco China i.e., Invesco China and CHIS go up and down completely randomly.
Pair Corralation between Invesco China and CHIS
Given the investment horizon of 90 days Invesco China Technology is expected to generate 1.6 times more return on investment than CHIS. However, Invesco China is 1.6 times more volatile than CHIS. It trades about 0.0 of its potential returns per unit of risk. CHIS is currently generating about -0.05 per unit of risk. If you would invest 4,398 in Invesco China Technology on September 3, 2024 and sell it today you would lose (341.00) from holding Invesco China Technology or give up 7.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 30.91% |
| Values | Daily Returns |
Invesco China Technology vs. CHIS
Performance |
| Timeline |
| Invesco China Technology |
| CHIS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Invesco China and CHIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco China and CHIS
The main advantage of trading using opposite Invesco China and CHIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco China position performs unexpectedly, CHIS 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 CHIS will offset losses from the drop in CHIS's long position.| Invesco China vs. Franklin FTSE South | Invesco China vs. Franklin FTSE Japan | Invesco China vs. Franklin FTSE India | Invesco China vs. Franklin FTSE Brazil |
| CHIS vs. Franklin FTSE South | CHIS vs. Franklin FTSE Japan | CHIS vs. Franklin FTSE India | CHIS vs. Franklin FTSE Brazil |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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