Correlation Between IShares China and CHIX
Can any of the company-specific risk be diversified away by investing in both IShares China and CHIX 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 IShares China and CHIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares China Large Cap and CHIX, you can compare the effects of market volatilities on IShares China and CHIX 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 IShares China with a short position of CHIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares China and CHIX.
Diversification Opportunities for IShares China and CHIX
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and CHIX is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding iShares China Large Cap and CHIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIX and IShares 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 iShares China Large Cap are associated (or correlated) with CHIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIX has no effect on the direction of IShares China i.e., IShares China and CHIX go up and down completely randomly.
Pair Corralation between IShares China and CHIX
If you would invest 1,172 in CHIX on August 28, 2024 and sell it today you would earn a total of 0.00 from holding CHIX or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
iShares China Large Cap vs. CHIX
Performance |
| Timeline |
| iShares China Large |
| CHIX |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares China and CHIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares China and CHIX
The main advantage of trading using opposite IShares China and CHIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares China position performs unexpectedly, CHIX 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 CHIX will offset losses from the drop in CHIX's long position.| IShares China vs. iShares MSCI Brazil | IShares China vs. iShares MSCI Emerging | IShares China vs. iShares MSCI Japan | IShares China vs. iShares MSCI Hong |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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