Correlation Between WisdomTree China and CHIR
Can any of the company-specific risk be diversified away by investing in both WisdomTree China and CHIR 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 CHIR 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 CHIR, you can compare the effects of market volatilities on WisdomTree China and CHIR 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 CHIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree China and CHIR.
Diversification Opportunities for WisdomTree China and CHIR
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and CHIR is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree China ex State Owne and CHIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIR 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 CHIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIR has no effect on the direction of WisdomTree China i.e., WisdomTree China and CHIR go up and down completely randomly.
Pair Corralation between WisdomTree China and CHIR
If you would invest 2,579 in WisdomTree China ex State Owned on September 12, 2024 and sell it today you would earn a total of 559.00 from holding WisdomTree China ex State Owned or generate 21.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
WisdomTree China ex State Owne vs. CHIR
Performance |
| Timeline |
| WisdomTree China |
| CHIR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
WisdomTree China and CHIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree China and CHIR
The main advantage of trading using opposite WisdomTree China and CHIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree China position performs unexpectedly, CHIR 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 CHIR will offset losses from the drop in CHIR's long position.| WisdomTree China vs. KraneShares CSI China | WisdomTree China vs. Invesco China Technology | WisdomTree China vs. iShares MSCI India | WisdomTree 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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