Correlation Between WisdomTree China and CHIC
Can any of the company-specific risk be diversified away by investing in both WisdomTree China and CHIC 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 WisdomTree China and CHIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree China ex State Owned and CHIC, you can compare the effects of market volatilities on WisdomTree China and CHIC 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 WisdomTree China with a short position of CHIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree China and CHIC.
Diversification Opportunities for WisdomTree China and CHIC
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and CHIC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree China ex State Owne and CHIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIC and WisdomTree 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 WisdomTree China ex State Owned are associated (or correlated) with CHIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIC has no effect on the direction of WisdomTree China i.e., WisdomTree China and CHIC go up and down completely randomly.
Pair Corralation between WisdomTree China and CHIC
If you would invest 1,543 in CHIC on August 24, 2024 and sell it today you would earn a total of 0.00 from holding CHIC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
WisdomTree China ex State Owne vs. CHIC
Performance |
| Timeline |
| WisdomTree China |
| CHIC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
WisdomTree China and CHIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree China and CHIC
The main advantage of trading using opposite WisdomTree China and CHIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree China position performs unexpectedly, CHIC 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 CHIC will offset losses from the drop in CHIC's long position.| WisdomTree China vs. Global X MSCI | WisdomTree China vs. WisdomTree Emerging Markets | WisdomTree China vs. Invesco China Technology | WisdomTree China vs. iShares MSCI China |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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